The Iraq Study Group Report addressed 4 alternatives it considered and rejected.
1) Precipitate Withdrawal: "A premature American departure from Iraq would almost certainly produce greater sectarian violence and further deterioration of conditions." The Report noted that because of "the role and commitments of the United States in initiating events that have led to the current situation, [...] it would be wrong for the United States to abandon the country through a precipitate withdrawal of troops."
2) Staying the Course: "Current U.S. policy is not working." The commitment of U.S. personnel and financial support "is not sustainable over an extended period, especially when progress is not being made."
3) More Troops: "Sustained increases in U.S. troop levels would not solve the fundamental cause of violence in Iraq, which is the absence of national reconciliation." Additionally, and more practically, the U.S. does "not have the troops or equipment to make a substantial, sustained increase in our troop presence."
4) Division into Three Regions: "Because Iraq's population is not neatly separated, regional boundaries cannot be easily drawn." Additionally, dividing Iraq into Shia, Sunni and Kurdish regions "would confirm wider fears across the Arab world that the United States invaded Iraq to weaken a strong Arab state." Creating semiautonomous regions would have implications for distribution of oil revenues as well - see Current Situation, Economic Situation.