Rupert Cornwell: She raised our hopes – then dashed them

How dazzled we once were. There stood Condoleezza Rice, newly installed Secretary of State, early in George W. Bush's second term, clad in a stunning all-black outfit, complete with knee-high boots, as she addressed a gathering of US troops in Germany. The fashion-writers had a field day, and so did the diplomatic scribes. This was the new dominatrix who would re-invigorate America's foreign policy, win back allies estranged over Iraq – and who knows what else?

The apogee came a few months later, in October 2005, when she took then Foreign Secretary Jack Straw on a visit to Birmingham, Alabama, the city that was emblem of the segregated South and where she had spent her childhood. It was billed as an informal bonding session with an important professional colleague. But when she stopped at her old school to tell pupils how anything in life was possible – even that a black woman could become Secretary of State – it felt like a warm-up for a Presidential run.

When pressed, the lady smilingly demurred, but did not reject the possibility outright. We duly fantasised about an all-female Condi vs Hillary match-up in 2008. And fantasy it was. Some still believe that Rice could be picked as running mate by whoever does win the Republican nomination. Three years on, America remains as unpopular in the world as ever. Its foreign policy is a mess, and at least measured by those early hopes, Condoleezza Rice has been a massive disappointment.

Her close relationship with Bush, we assumed, would return the State Department to centre stage, after the pummelling Colin Powell took from Donald Rumsfeld and Dick Cheney. Normally, a strong bond with the President has been the hallmark of successful Secretaries of State: take Henry Kissinger under Nixon, or James Baker under Bush senior. Alas, proximity to Bush junior has been at the root of Rice's problems. "We are completely in sync," the President has told foreign visitors; "When she speaks, you know she is speaking for me." Fine, except that her boss remains the most internationally disliked President in living memory.

After three years in the job, the scoresheet for Rice is not pretty. US relations with Russia, the field in which she built her reputation as an adviser to the elder Bush, are sliding back towards a Cold War freeze. True, of late the security situation inside Iraq has started to improve, but the poison the invasion spread throughout the region is no less toxic.

Desperately, the US and its allies try to cope with the immense strategic victory that the toppling of Saddam Hussein handed Iran, without the mullahs having to lift a finger. In Pakistan, Washington is reaping the bitter fruits of its embrace of Pervez Musharraf. Parallels are being drawn with that earlier bad bet placed by the US, on the Shah of Iran in the 1970s – except that the stakes with nuclear-armed Pakistan are even higher.

Belatedly, Rice has come to understand that the Israeli-Palestinian conflict is not a sideshow, but the very core of tensions in the region. Not, however, before she had initially given Israel the green light to continue its 2006 war against Hezbollah in Lebanon – which ended in moral defeat for the Jewish state – on the grounds that we were witnessing "the birth pangs of the new Middle East".

Now a flurry of diplomatic activity has led to next week's scheduled Middle East "conference" in Annapolis, Maryland. Though it seems set for next Tuesday, no date has yet been formally announced. The hotel rooms in Washington have been booked, but it is still not even clear who will attend. The Arab states, whose presence is crucial for the meeting's credibility, will only make up their mind later this week.

Normally, such events are minutely choreographed in advance. This time there is no such safety net. In recent days, expectations have been prudently lowered; everything may yet go right on the night. But a failure would be a further blow to America's prestige and clout in the region. And this time Rice would not be able to escape responsibility.

As national security adviser in Bush's first term, she was central to the planning of the war and its aftermath. Yet the public, however disillusioned, placed little of the blame upon her. In part, that was because she could not stop the feuding between Powell and the rival alliance of Cheney and Rumsfeld – even though co-ordination of security policy across government was her brief.

Her tenure now looks disastrous. According to David Kay, the weapons inspector who led the post-war hunt for Saddam's non-existent WMD, she was "probably the worst national security adviser since the office was created." In State of Denial, his latest and most damning book on the Iraq war, the journalist Bob Woodward records that even the first President Bush thought she "was not up to the job."

So perhaps we should not have expected better when she moved to the State Department. Proximity to the President seems also to have soured her dealings with its staff – as testified by the remarkable rebellion against the possibility of forced postings to Baghdad (and the dubious reward of being protected by Blackwater, whose cavalier violence has inflicted even more damage on the US image in Iraq).

At a staff meeting last month, the dissatisfaction exploded into public view, along with a poll of members of the Foreign Service Association, essentially the diplomats' trade union, that found that only 12 per cent of its members thought Rice was "fighting for them". The outburst reflected resentment of her reliance on a small group of loyalist aides – but also an understandable anger that the State Department – which Rice had allowed to become sidelined in the run-up to the war – was now being made to carry the can.

But the shortcomings of Rice the manager are only one part of the problem. What does she really stand for? US foreign policy has always been a blend of idealism and realism, but few have zig-zagged between the two as bafflingly. Under her mentor Brent Scowcroft, national security adviser to George Bush the elder, she was a pragmatist and a realist. But under this President Bush she became an idealist, whose "evangelical tone" shocked Scowcroft.

The high-water mark was a speech at Cairo University in that heady year of 2005, espousing the cause of liberty and noting that in the past the US had "pursued liberty at the expense of democracy – and achieved neither". Two years on, the promise of change lies in rubble. A chastened realism is back. As the Iran challenge grows, the US once more embraces undemocratic regimes in Saudi Arabia and Eygpt. Her outfits may still be as sharp as back when she spoke to the troops in Germany. But the dreams have long since died.