US President George W. Bush said that the formation of Iraq’s new government will serve as a “devastating defeat” for Al-Qaeda, but the top US diplomat warned sectarian violence remains a major problem in the country. “I fully understand that a free Iraq will be an important ally on the war on terror, will serve as a devastating defeat for the terrorists and Al-Qaeda and will serve as an example for others in the region who desire to be free,” Bush told reporters at the White House. Full Story