WASHINGTON (CNN) -- U.S. officials said Wednesday that a "joint campaign plan redesign team" is preparing a new diplomatic and military strategy for Iraq, which is expected to be approved by the end of the month.

The team, led by Gen. David Petraeus and U.S. Ambassador to Iraq Ryan Crocker, is laying out a new course for how to proceed in the four-year-old war, the officials told CNN.

One element of the plan is to try to identify groups of people -- including possibly Sunni extremists and militia groups -- with whom U.S. officials feel they can do business, such as negotiating power-sharing and cease-fire agreements and granting economic aid, the sources said.

But those with whom officials feel they cannot do business -- such as determined suicide bombers -- will remain targets of military forces, the sources said.

The officials cited an inability to maintain current troop levels into the summer as a reason for the changed course.

"We have been focused too long on defeating the enemy," one official said. "We need to bring them to the negotiating table."

The announcement is an acknowledgment that the traditional war-fighting stance of trying to capture or kill all insurgents is failing, that the country may have devolved into a civil war, and that the only way to proceed is to use military force sparingly and attempt to bring many insurgents into the fold.