His comments come as delegates from over 60 countries prepare to begin two days of international conferences in Egypt aimed at bringing an end to the conflict and creating economic and political stability in Iraq.
Sir Michael, who previously led United Nations (UN) forces in Bosnia, has written a book drawing parallels between the tactics employed by militants in Iraq and those used by George Washington's forces during the American War of Independence.
Asked by Newsnight whether he thought insurgents were "right" to try to push American troops out of Iraq, the former senior army commander replied: "Yes I do."
"I don't excuse them for some of the terrible things they do, but I do understand why they are resisting," Sir Michael explained.
"It is the soldiers who have been telling me from the frontline that the war they have been fighting is a hopeless war, that they cannot possibly win it and the sooner we start talking politics and not military solutions, the sooner they will come home and their lives will be preserved," he added in reference to his perception of the views of serving British troops.
The future of the controversial war remains the subject of intense debate in both Britain and the US, where president George Bush earlier this week vetoed a Congressional bill which linked the supply of emergency military funding to a timetable for the withdrawal of American forces from Iraq.
Members of the international community gathering in the Egyptian resort of Sharm El Sheikh will today discuss a UN-led international compact for Iraq (ICI), which will offer the country political and financial support in exchange for reforms.
Commenting on the five-year plan yesterday, foreign secretary Margaret Beckett said: "The compact is a very impressive piece of work - it is the most comprehensive and serious reform programme any government in the region has committed itself to."
A separate conference tomorrow will see Iraq's regional neighbours, including Iran and Syria, meet with western powers to further discuss the nation's future.
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