As war winds down, will Iraq's progress hold steady?

Violence has plummeted and US forces are pulling back, but the year ahead will test the staying power of gains throughout the country.

Last year saw vast improvements in Iraq. Violence dropped dramatically and Iraqis took greater political and military control. But war is still being fought, suicide bombings remain a near daily menace, and the gains are fragile. The year ahead will test the staying power of progress as US military forces begin to withdraw, Iraqi politicians jostle for power in Baghdad and beyond, and a new administration in Washington assumes responsibility for the war as it enters its seventh year.

How safe is Iraq?

The mix of the US and Iraqi military troop surge, many Sunnis turning against Al Qaeda in Iraq (AQI) to work with American forces, and a cease-fire among the Shiite militia known as the Mahdi Army ended much of the sectarian fighting that racked the country in 2007.

The increase in security has been striking in Baghdad, where shops are reopening and concrete barriers are being removed. But the surge did push insurgents north to cities like Mosul and Baquba, where attacks are still common but increasingly focused on Iraqi security forces rather than civilians. To be sure, insurgents are still able to carry out high-profile suicide bombings.

According to estimates from independent organizations, between 6,700 and 8,000 Iraqis were killed in attacks in 2008, more than a 50 percent drop compared with 2007. According to the Associated Press, 314 US troops are believed to have died in Iraq in 2008 compared with 904 servicemen and women killed in 2007.

Will President-elect Barack Obama accelerate the US withdrawal?

Under the Status of Forces Agreement (SOFA) between Iraq and the US, some American troops have already started pulling back to major bases that will become regional military hubs. US forces are set to leave most cities by July and are scheduled to be completely out of Iraq by the end of 2011.

Even though Mr. Obama said during his campaign that he would withdraw forces within 16 months of taking office, military commanders, senior Iraqi officials, and Middle East experts have stressed that a rush to leave could be disastrous.

"Realism is the key to success, and Iraqi and US leaders need to be extremely careful about exaggerating Iraqi capabilities and the speed with which the US can safely withdraw its forces and advisory teams from Iraq," cautioned Anthony Cordesman, a senior fellow at the Center for Strategic and International Studies, in a recent report. "The Iraqi Security Forces (ISF) are still very much a work in progress."

American diplomats understand the need to keep a close eye on changing conditions before ending the occupation. "We've got to be very agile here, I think, as conditions change in Iraq and as Iraqis change in their perceptions," says US Ambassador Ryan Crocker, who is leaving next month after two years as head of the US mission in Iraq. "So far we've done a pretty fair job of what could have been extremely bad for the US and Iraq, and that was perpetuating the sense that the US is determined to hang on here."

How quickly American forces could withdraw "depends on how much equipment we're leaving behind," says one military official. "If we're allowed to leave most of it behind, we can be gone pretty quickly."

Iraqis could vote in a national referendum later this year on whether to demand that US troops withdraw sooner. If that vote is held, it has the potential to force the withdrawal of American forces from Iraq as early as mid-2010 – a similar time frame promised by Obama.

What role will the Sons of Iraq play this year?

American military commanders believe the group is essential to keeping the peace. What happens to this approximately 90,000-large, well-armed but largely untrained group could impact the state of the insurgency.

The Sons of Iraq (SOI) includes many ex-insurgents and is a largely Sunni group originally funded by the US. It grew out of the Awakening Movement in Anbar Province in which tribal chiefs turned against AQI and joined the Americans. But now it's bankrolled by the Shiite-led government, which has pledged to incorporate more of them into official security forces but remains suspicious of the local militias. It's still unclear whether Prime Minister Nouri al-Maliki will keep them on the government payroll or disband the group altogether. As a counterweight, Mr. Maliki has established tribal support councils funded by his government to serve similar functions in Shiite areas.

SOI members say that, if they are disbanded, many will be either be killed by AQI fighters or return to the insurgency.

Has the political situation improved?

Iraqis have more control over their destiny than at any time since Saddam Hussein was toppled in 2003. As security fears recede, the focus has shifted to whether provincial elections – scheduled for Jan. 31 – will result in more representation and eventually a better-functioning government. The next national elections could take place as early as December 2009.

The provincial polls in 14 of Iraq's 18 provinces are expected to redraw Iraq's political landscape. Iraq's Sunni Arab minority, which widely boycotted previous polls, could come out in large numbers. A more representative government would mean less likelihood of a resurgence of the Sunni insurgency but would include setbacks for Kurdish and Shiite parties.

A bewildering array of candidates and parties and lingering security concerns will make voting a challenge in many parts of the country, where literacy rates have plunged since the 1990s. In Maysan Province, for instance, 800 candidates are expected to be on the ballot.

How volatile is the rift between Arabs and Kurds?

It is simmering and could erupt if Baghdad and the semiautonomous Kurdistan Regional Government (KRG) don't come to an agreement over Kirkuk, the oil-rich city that is under central government authority but claimed by the Kurds as their historic capital. Added to the mix is a large Iraqi Turkmen minority backed by Turkey. A referendum to decide who should control the city has been postponed twice, and the UN has so far been unable to find an acceptable formula for a political settlement that would pave the way for a vote.

How is the Iraqi economy doing?

Over the next year, troubles in the Iraqi economy – rampant corruption, a still dismal infrastructure, and high unemployment – will become more pressing issues. Ambassador Crocker, in an interview, cites failure to establish legal structures and the inability to control corruption at the top of his list of concerns for 2009.

"The toughest nut to crack is the rule of law – that's a multigenerational task," says Alex Laskaris, head of the State Department's Provincial Reconstruction Team near Mosul, where the US has been helping to fly in Iraqi judges from outside the volatile province.

With low oil prices, the country is facing at least a 23 percent deficit in its 2009 budget, which had been based on projections of $62 per barrel for oil. Iraq's finance minister has warned of cutbacks in government spending, which could threaten reconstruction projects and job creation.

"The biggest feeder of the insurgency here has been unemployment," notes Maj. Adam Boyd, intelligence officer for the 3rd Squadron, 3rd Armored Cavalry Regiment in Mosul.

While the drop in violence has prompted tens of thousands of families to return, professionals are not expected to come back in large numbers until security and essential services improve further.

The International Organization for Migration said in December that more than 230,000 displaced Iraqis had returned home by November, almost all of them coming from other parts of the country and most returning to Baghdad.

How does Iran factor in?

Iran's influence is pervasive. And among Iraq's neighbors, it has perhaps the most destabilizing potential. But US and Iraqi officials say Tehran since last summer has lowered its level of military and political interference in Iraq. Although Tehran has good relations with Maliki and the country's leading Shiite religious figures, most Iraqis view it with suspicion. But Iran's historical trade relationship with Iraq makes it a key economic partner.

"I think there are very clearly limits to Iran's ability to influence events here," says Crocker. "But they could still do a lot of damage if they decide to ratchet that damage up."