Parliament remained locked over provincial election law, following July presidency council veto of draft with Kirkuk power-sharing provision; lawmakers 6 Aug recessed for summer. Provincial polls due by 1 Oct, now unlikely before early 2009. Shiite cleric Moqtada Sadr 8 Aug announced split of Mahdi Army into social wing and elite fighters unit, 28 Aug extended ceasefire. Draft security deal between U.S. and Iraq agreed, but U.S. troop withdrawal and immunity unresolved. Govt offensive in Diyala province making little headway; operations to arrest U.S.-backed Sunni militias drew criticism from Sunni lawmakers and U.S. military officials. Despite continued decline in overall death tolls, ruinous bombings hit many cities including Tal Afar in north, Kirkuk, Karbala and Baghdad – scores killed, including Sunni militia leaders and Shiite pilgrims. U.S. to transfer Anbar province security to Iraqis 1 Sept. Jordan’s King Abdullah in Baghdad 11 Aug – first Arab head of state visit since 2003 U.S.-led invasion; Jordan to reopen Baghdad embassy, closed since 2003 bombing. Lebanon PM Siniora visited 20 Aug. Turkish military reported 16 Aug bombing of PKK base in northern Iraq. U.S. General David Petraeus ended term as head of U.S. operation in Iraq, succeeded by chief deputy Lieutenant General Ray Odierno. UNSC renewed UNAMI mandate 1 year 7 Aug. Iraq, Chinese CNPC 27 Aug signed $3b oil contract, first major deal with foreign company since 2003.

Main Sunni bloc rejoined govt 19 July, nearly 1 year after withdrawal over allegedly sectarian security operations. Parliament 22 July approved electoral law with controversial provision for poll postponement or power sharing in Kirkuk – Kurds abstained, then 2 members of presidency council vetoed, sending bill back to parliament. Turkey concluded strategic agreement with Iraq 10 July during Turkish PM Erdogan Baghdad visit. Negotiations with U.S. on security pact continued; PM Maliki 7 July suggested memorandum of understanding, raised prospect of U.S. troop withdrawal timetable. Continued bombings hit Baghdad, Falluja and Mosul. Female suicide bombers in Baghdad 28 July killed at least 25 Shiite pilgrims; attack same day in Kirkuk killed at least 25. Iraqi forces started major offensive 29 July in Diyala province, which saw string of deadly suicide attacks in month. Handover of Anbar province security to Iraqis still on hold after June postponement; Qadisaya province handed over 16 July. Turkish military 24, 29 July reported airstrikes on PKK targets in northern Iraq.

Relative calm after 10 May ceasefire with Sadrist militias in Baghdad’s Sadr City and Iraqi army takeover, but punctuated by devastating attacks. Iraqi forces swept southern city Amara from 18 June in further crackdown on Shiite militias. Governor of western Anbar province 26 June said U.S. to transfer security to Iraqis – postponed 27 June; Diwaniya handover postponed 30 June. Bombings continued including huge car bomb near Baghdad market 17 June killing at least 63; suicide attack 26 June at Anbar tribal council meeting killing 20, including 3 U.S. marines; Mosul car bomb same day with 18 dead. PM Maliki in Tehran 7-8 June; Iran urged security cooperation, criticised possible long-term U.S.- Iraq security pact. Maliki 13 June rejected U.S. proposals; but President Talabani, U.S. President Bush in discussions 25 June. Change in Sadr strategy mid-month with decisions to set up elite wing in Mahdi army to fight Americans and run Sadrist candidates as independents in upcoming provincial council elections. Australia 2 June ended combat operations, started return of 550 troops. UNAMI 5 June presented long- awaited stage-one proposal concerning disputed territories, recommending initial allocation of 4 districts. Negotiations with major energy firms to develop 6 oil blocks, 2 gas fields continuing.

Iraqi forces, assisted by U.S., continued to battle Shiite militants in Baghdad’s Sadr City early May. Truce, brokered 10 May with Tehran support, holding tenuously. Militants agreed to Iraqi, not U.S., security force patrols – some 10,000 deployed 21 May unopposed, but security actions against militias continue. PM Maliki 14 May took charge of Mosul offensive, remaining Al-Qaeda stronghold; resistance limited: some 1,000 reported detained, others dispersed. 2 bomb attacks by youths – possibly detonated by remote – near capital 14 May, at Sunni funeral and army post: over 20 reported dead in blasts, including attackers. U.S. helicopter strike 22 May north of Baghdad killed 8 – Iraqis claimed all civilians. 14 suspected Sunni insurgents killed in Tikrit 29 May by U.S.-backed Sunni militia; suicide bombings in, near Mosul same day killed at least 19, in Anbar province 31 May at least 9. Senior Turkish official met first time publicly with PM Nechirvan Barzani of Kurdistan Regional Government 2 May. Turkoman members of Kirkuk provincial council ended 2-year boycott 19 May. Pentagon audit 23 May found extensive lack of accountability in spending of $8.2b U.S. funds, $1.8b Iraqi assets. UN conference on Iraq in Sweden 29 May to review 2007 5-year International Compact with Iraq package.

Deadly Basra operation initiated by PM Maliki end-March against Sadrist militias drew sharp criticism for poor troop performance, bad planning. Situation remains unstable though govt forces have fragile hold on Basra port and fighting has levelled. Senior Sadr aide Riyad al-Nuri shot dead 11 Apr in Najaf. Clashes continued, intensified end-month, in Sadr City neighbourhood of Baghdad: hundreds killed. U.S. Gen. Petraeus, Amb Crocker in testimony to U.S. Congress emphasised “fragile and reversible” progress; recommended suspension of troop reductions. U.S. Sec. State Rice in surprise Baghdad visit 20 Apr to support Maliki. U.S., Maliki pressed for engagement of Arab neighbours. Iranian FM Mottaki reiterated support for Iraqi govt efforts to disarm Shiite militias in Basra, despite continued U.S. accusations Tehran arming, training them. Suicide bombings elsewhere killed over 100; at least 53 died in bus blast 15 Apr in Baquba. Assyrian Orthodox priest killed 5 Apr in Baghdad home. Trial of former deputy PM Tariq Aziz, accused of involvement in executions of merchants, opened in Baghdad 29 Apr.

Hundreds killed since government mounted operation 25 March against Shiite militias in Basra. PM Maliki initiated crackdown involving some 30,000 Iraqi troops and police; U.S., British forces provided support; President Bush praised action. Fighting appeared to subside after 30 March call by radical Shiite cleric Moqtada Sadr for “end to armed appearances”, halt to government raids. Violence in Baghdad left over 100 dead; thousands demonstrated in Sadr City neighbourhood. 3-day curfew ended 31 March, amid bombing of fortified Green Zone – also hit 23 March with at least 15 killed; U.S. said rockets supplied by Iranian Quds Force. Violent clashes set off in Kut, Hilla, Diwaniya – scores dead. Suicide strike in Mosul 23 March killed some 40. Bombing in Karbala 17 March killed over 50. Turkey bombed PKK positions in northern Iraq 29 March; claimed 15 rebels dead. U.S. VP Cheney in mid-month visit: talks held with Kurdish leaders in north, Maliki and U.S. General Patraeus in Baghdad. Presidential council reversed course on important provincial powers law; allowed to pass. Iraqi Christian archbishop found dead in Mosul, 2 weeks after kidnapping. Oil exports and operations in Basra restored end-month after pipelines bombed.

Positive and negative developments in month. Parliament passed key legislation 13 Feb after acrimonious delay: laws set state budget ($48b) and provide for limited detainee amnesty. Presidential council then rejected part of legislation (passed by parliament) defining relationship between Baghdad and local authorities 27 Feb. Radical Shiite cleric Muqtada Sadr announced 6-month extension of his Mahdi Army ceasefire 22 Feb. Turkish troops crossed into northern Iraq 21 Feb after air, artillery strikes in continuing campaign against Kurdistan Workers Party (PKK) bases: reportedly began troop pull-out 29 Feb. Turkey claimed 230 PKK, 27 military killed in 3,000-10,000-strong operation. PKK claim 81 Turkish soldiers and 2 PKK killed, with fewer than 1,000 troops crossing border. Turkey warned Iraq not to shelter “fleeing rebels”; Iraqi FM urged withdrawal and stressed threat to sovereignty. Elsewhere security remained volatile: suicide bomber targeted Shiite pilgrims in Iskandariya en route to Karbala for Arbaeen festival 24 Feb, killing 40; car bomb killed 33 in Balad 10 Feb coinciding with U.S. Defense Sec. Gates’ arrival in Baghdad. Leaders of Sunni Awakening Council targeted by al-Qaeda in Iraq: Sheikh Ibrahim Mutayri al-Mohammedi killed 23 Feb north of Falluja.

Parliament passed “Accountability and Justice Law” 12 Jan allowing former Baath party officials to return to public life. Measure faced criticism it sends even more Baath members into early retirement. PM Nouri Maliki announced start of major offensive against al-Qaeda militants in northern city of Mosul after security deterioration; over 30 died in 23 Jan blast. Clashes erupted in south between government forces and Shiite “Soldiers of Heaven” cult group in Nasiriya and Basra 18 Jan. Spate of suicide attacks occurred around country over Shiite Ashura festival. Radical Shiite cleric Moqtada Sadr warned 6-month ceasefire by his Mahdi Army militia due to expire in Feb. End month saw attacks on remaining UK troops in Basra and 2 bombs in Baghdad 1 Feb killing some 70. Turkish air force bombed Kurdish PKK rebels based in northern Iraq 15 Jan (see Turkey).

Quarterly report from U.S. Pentagon to Congress indicated significant security improvement from September to November 2007, but “disappointing lack of progress” on key legislation and continued dependence on coalition forces. U.S. Sec. State Condoleezza Rice made surprise visit 18 December. Visit coincided with Turkish military incursion into northern Iraq against PKK militants (see Turkey), and other violence around Iraq that killed 30. UK handed over security in Basra to Iraqi forces 16 December. Diyala province saw spike in violence early in month with 60 killed in 5 separate attacks. Violence elsewhere included car bombs in Amara city, Maysan province, 12 December and suicide attacks in Baiji and Baghdad. Iraqi leaders, including parliament of Kurdish region, agreed to 6-month delay in implementing article 140 of constitution, including controversial referendum on status of Kirkuk and other “disputed areas”. UN Security Council extended mandate of Multinational Force until end of 2008, 18 December.

Significant improvements in security but political stalemate continues. Suicide bombings, attacks on U.S. forces and sectarian “cleansing” decreased notably, though sporadic violence continued including bomb attack on Baghdad market 24 November killing 15 and suicide bomb near health ministry in central Baghdad 25 November killing 10. Sunni groups launched operations against al-Qaeda: Islamic Army in Iraq (IAI) attacked positions near Samarra 9 November; similar operation by 1920 Revolution Brigades at al-Buhriz in Diyala province 10 November. Security forces detained 40 linked to Adnan al-Dulaimi, leader of main Sunni parliamentary bloc Accordance Front, after several “rigged” car bombs found near his compound. Government sent draft law reversing some aspects of de-Baathification to parliament 25 November – but met opposition, including from politicians loyal to Shiite cleric Moqtada al-Sadr. Despite 31 December deadline, Kirkuk referendum unlikely to occur leaving Kurds with choice to press for new deadline or settle for alternative process to determine area’s status. UNSC mandate of multinational force expires end 2007: U.S. and Iraqi representatives signed “declaration of principles” 26 November on continued military, political and economic ties. Australian PM-elect Kevin Rudd announced withdrawal of 550 combat troops by mid-2008.