In an admission that will make uncomfortable reading in London and Washington, the Labour leader dismissed one-by-one the reasons used by his predecessor, John Howard, to join the Anglo-American invasion of Iraq five years ago.
"Have further terrorist attacks been prevented? No, they have not been, as the victims of the Madrid train bombing will attest," Mr Rudd told parliament.
"Has any evidence of a link between weapons of mass destruction and the former Iraqi regime and terrorists been found? No
"Have the actions of rogue states like Iran been moderated? No ... Iran's nuclear ambitions remain a fundamental challenge.
"After five years, has the humanitarian crisis in Iraq been removed? No it has not."
Mr Rudd, whose campaign for election last November included a pledge to withdraw Australian combat forces from Iraq, said pre-war intelligence had been "abused" by the Howard government.
He said there had been a "failure to disclose to the Australian people the qualified nature of the intelligence - for example, the pre-war warning that an attack on Iraq would increase the terrorist threat, not decrease it".
Mr Rudd, a former diplomat, also dismissed his predecessor's argument that Australia had been obliged to send troops to Iraq because of its long-standing alliance with the United States.
He said while he valued the alliance highly, it did not mean that Canberra should automatically accede to US requests for military support.
His comments came a day after Australia's 550-strong combat force began leaving its base at Tallil, 185 miles south of Baghdad.
Mr Howard, who has kept a low profile since being ousted from office six months ago, said he was still convinced that being part of the 2003 invasion of Iraq was justified.
"I firmly believe it was the right thing to have done," he said, while acknowledging that it was the hardest decision he made as prime minister and that the cost of the war had been "very, very heavy and much greater than anybody would have liked".
His decision to send troops was deeply influenced by the fact that he was in the US on an official visit on September 11, 2001, when terrorists struck New York and Washington.
Mr Howard was one of four leaders who supported the US-led coalition but who are all now out of office: Tony Blair, Jose Maria Aznar of Spain and Polish president Aleksander Kwasniewski.
One of Mr Howard's former senior officials said the government had been fully briefed on the fact that invading Iraq would damage US prestige, foster anti-Western sentiment, require a massive troop presence and destabilise the wider Middle East.
"All that was predictable and I don't think the benefits of the West going in were worth the cost," the official, who declined to be named, told the Sydney Morning Herald.
"That was my judgment at the time and that hasn't changed."
Australia will still have about 800 military personnel in and around Iraq, including a 110-strong diplomatic security detachment in Baghdad, sailors on board warships in the Persian Gulf and Royal Australian Air Force crew.
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