While the Bush Administration declined to comment directly on the findings of Israel's Winograd Commission, it acknowledged that the public outcry against Prime Minister Ehud Olmert would hindering efforts to divide the biblical Land of Israel.
President George W. Bush sees Olmert as "essential in working toward a two-state solution" between Israel and the Palestinian Arabs, White House spokesman Tony Snow said on Monday.
But according to officials in Olmert's own Kadima Party, the prime minister's days at the helm are numbered after the Winograd Commission found him guilty of ineffective leadership during last summer's Second Lebanon War.
The publication of the report was followed by widespread calls for Olmert's resignation.
The new political reality in Israel will clearly "make it harder for the US leadership to move forward" with its own agenda, US Assistant Secretary of State David Welch said at a conference in Washington.