The UK and US have repeatedly denied Iraq is facing a civil war, but Mr Allawi suggested there was no other way to describe the sectarian violence.

Meanwhile, at least 12 people have been killed in a series of violent incidents in the north of the country.

Analysts say Mr Allawi's comments are part of political manoeuvring as talks continue over creation of a government.

Speaking to troops in Basra, UK Defence Secretary John Reid insisted that the terrorists were failing to drive Iraq into civil war.

There has been a cycle of sectarian reprisals and revenge killings between Sunnis and Shias.

The destruction of the Shia shrine at Samarra on 22 February made some observers wonder if the country was heading towards civil conflict.

The BBC News website's world affairs correspondent Paul Reynolds says the unrest is threatening hopes among the US and its allies for substantial troop withdrawals in the coming months.

In other incidents across the country on Sunday:

• US-led Operation Swarmer, against insurgents and foreign fighters near Samarra, is now into its fourth day
• Police say that at least eight civilians - including a woman and a child - were killed when US forces opened fire after coming under attack in the town of Dhuluiya, north of Baghdad
• Gunmen killed three Iraqi police in the northern town of Mosul
• Two bomb attacks killed a policeman and wounded 12 other people in Baquba, north-east of Baghdad
• There were reports of a mortar shell exploding in the southern city of Karbala as Shias gathered for one of the biggest events of their religious calendar. No casualties were reported.

Mr Allawi heads the Iraqi National List, a secular nationalist alliance made up of Sunnis and Shias.

Speaking on BBC TV's Sunday AM programme, he said it would be a mistake to underplay Iraq's problems, although the country was "edging towards" a political deal.

He said he had warned against creating a vacuum in the country and raised concerns about the insurgents and the dismantling of the military.

"It is unfortunate that we are in civil war. We are losing each day as an average 50 to 60 people throughout the country, if not more.

"If this is not civil war, then God knows what civil war is."

Mr Allawi added that a national unity government may not be "an immediate solution" to the country's problems.

Iraq is moving towards the "point of no return", he said, when the country would fragment.

"It will not only fall apart but sectarianism will spread throughout the region, and even Europe and the US will not be spared the violence that results...," he said.