After wavering Republican senators came under fierce political pressure, the bill garnered 56 votes in the 100-member chamber, but fell four votes short of the 60-vote supermajority needed to pass the bill.
The measure, framed by Democratic Senator James Webb, and backed by Republican war critic Senator Chuck Hagel, would have mandated rest periods for troops equal to the length of time they spent on combat tours.
Its failure was the latest bitter disappointment for Democrats who grabbed control of Congress last year, but have repeatedly failed to change the course of US strategy in the unpopular war.
"We cannot continue to look at war and the people who fight and die in wars as abstractions, as pawns, as objects," said Hagel, who has branded the Iraq war a foreign policy disaster.
"The humanity of this is lost."
But critics branded the bill a "back-door" attempt to enforce a drawdown of US troops from Iraq.
Supporters did not dispute the fact it would limit troop levels, but said it was vital to ease the strain on the US military.
Though Secretary of Defence Robert Gates had warned he would ask Bush to veto the measure had it passed, the bill was seen as the Democrats' best shot of passing measures this year to challenge Bush's control of the war.
Republicans celebrated the defeat of the bill, which they said would have amounted to a legislated surrender of the Iraq war, a week after Bush declared his troop surge strategy was having success. - DDNEWS
