Tony Blair's backing for America's tough stance on Iraq is damaging the UK's reputation in the Middle East, a leading think tank has warned.

A report from the Foreign Policy Centre also said that the government should do more to win over public opinion in the region.

And in the wake of the row over the government's controversial Iraq dossier, Britain and America were urged to shun propaganda efforts and concentrate on building long term relationships.

The think tank, of which the prime minister is patron, argued that in the short-term Britain should differentiate itself from American foreign policy and rebut suggestions that it is engaged in a "war on Islam".

In the longer-term the UK should work with Arab societies to encourage social and political reform said the report, which was commissioned by the British Council.

It warned of a "widespread perception that US-UK foreign policy are interchangeable" and said Britain should do more to promote policy areas where it takes a different approach to that of America, such as on Israel-Palestine issues and the policy of engagement with Iran and Syria.

The report's authors also called for the British Council to take on an enhanced role in promoting understanding, with a target of having direct contact with one in 20 people in the Arab and Muslim world.

Among the recommendations contained in the report were that the Foreign Office should employ local spokesmen to liase with the media, make statements and appear on television programmes and a review of visa practices should be conducted to prevent them increasing bad feeling about the UK.

There should also be a Home Office press team for dealing with the Arab media, which would put stories such as the election of BNP councillors into broader context.

And the BBC should be funded to establish an Arab language TV service, added the report.

"It might seem an odd time to try engaging with people in the Middle East as the troops are assembling and bombs preparing to fly. But this is exactly the time for suspicions and hatred between the West and the Middle East to tackled with far greater effort and resources than ever before," said author Mark Leonard.

The report warned that attempts to win over opinion through propaganda would fail.

Many US public diplomacy efforts have proved counter-productive, concentrating "almost exclusively on broadcasting as loudly as possible its openness and love of dialogue, rather than actually engaging in it" said the report.

The creation of a youth friendly Arabic media station, over which the State Department retains editorial control, has given international broadcasting "a reputation for propaganda" whilst videos of Muslims living happily in the US fail to address concerns about foreign policy.