Widespread violence persisted but civilian deaths continued to decline and security in Baghdad improved. Radical Shiite cleric Muqtada al-Sadr and Abdul Aziz al-Hakim, head of Islamic Supreme Council of Iraq, agreed 6 October to end fighting between groups. Sadr also reiterated August suspension of Mahdi army’s activities for 6 months. U.S. operation against suspected senior leaders of al-Qaeda in Iraq in Lake Tharthar region, north of Baghdad led to 34 deaths including 15 civilians, 11 October; 5 October operations against suspected factional Shiite militia in Baquba killed 25. Turkey threatened major cross-border incursion against PKK guerrillas based in northern Iraq (see Turkey) citing reluctance by U.S. and Iraqi Kurd and Iraqi leadership to act. Turkish military amassed troops, conducted airstrikes in border area.

U.S. Commander General David Petraeus and Ambassador Ryan Crocker testified before U.S. Congress 10 September. Petraeus said surge had made progress in reducing violence but political reconciliation among warring factions remained elusive. President Bush announced withdrawal of 5,700 troops by December, 20,000 by summer 2008. Goverrnment reported drop in civilian deaths by 50% from August. Statistics collected by Iraqi Red Crescent Society and IOM suggest surge channelled displacement to new areas, as violence spread across Iraq’s ethno-sectarian map. Iraqi vice-president and Sunni leader Tariq al-Hashemi held talks with Shiite leader Grand Ayatollah Ali al-Sistani 27 September after publishing “Iraqi National Compact” reconciliation proposals. Delegation from ruling Shiite United Alliance met al-Sistani 23 September to discuss reuniting after bloc loyal to Moqtada al-Sadr broke away 15 September. Delayed legislation to regulate oil revenue sharing to be debated in parliament in October. Ministry of Interior suspended licence of private U.S. security firm Blackwater after 16 September incident in which 11 civilians died. Interior Ministry drafted legislation to end legal immunity for private security contractors; may affect up to 30,000 personnel.

Iraq is increasingly unstable, ungoverned and extremely violent. National unity government established June 2006 fell apart early August when largest coalition of Sunni Arab politicians, Iraqi Consensus Front (Tawafuq), pulled out of cabinet citing unfulfilled pledges. Its 44 MPs remain in place. Ruling parties – non-Sadrist Shiite and Kurdish – claimed parliamentary majority with new “moderate” alliance. Sunni Vice-President Tariq al-Hashemi signed reconciliation agreement with alliance leaders 26 August, but his Iraqi Islamic Party has not joined. 7 months into U.S. “surge”, Al-Qaeda in Iraq and other insurgents attacked areas outside U.S. focus. 4 coordinated blasts in remote north west Sinjar targeted 2 Yazidi villages 14 August, reportedly killing 500, constituting deadliest attack since 2003 U.S.-led invasion. Mass grave of some 300 reportedly found in Falluja 21 August. 2 car-bombs in Baghdad 1 August killed at least 67. Violence in Shiite areas also on rise: governors of Qadisiya and Muthanna provinces assassinated, both key players in U.S.-driven effort to suppress Sadrists in south. Moktada al-Sadr announced 29 August 6- month suspension of Mahdi Army militia’s operations, following 2 days of clashes with government forces killing 52.

Daily car bombs, shootings and suicide attacks continued while attempts made to move out of internal political and international diplomatic impasse. Worst violence saw 160 killed by bomb in mainly Shiite Amirli village north of Baghdad 7 July and 3 blasts in northern city of Kirkuk 16 July killing 85 - suggesting “surge” in Baghdad encouraging attacks elsewhere. Largest Sunni bloc, Iraqi Accordance Front, suspended membership in coalition government 1 August after 23 July demands including pardon for detainees not charged with specific crimes, commitment to human rights and disbanding of militias not met. U.S. Joint Campaign Plan indicates U.S. forces likely to remain in Iraq until summer of 2008. U.S. Ambassador to UN called on UN to play expanded role as mediator both internally and with neighbouring countries. U.S. and Iraqi officials began working on joint panel with Iran to investigate issues such as containing militias and insurgent group Al- Qaeda in Iraq. Saudi Arabia pledged to investigate possibility of opening diplomatic ties with Baghdad. Iraqi refugees causing humanitarian crisis in neighbouring countries; as many as 750,000 in Jordan, 1.5m in Syria. Rare show of positive national unity prompted by football team’s Asian Cup victory.

U.S. military announced full deployment of all extra troops, some 28,500, mostly in Baghdad, as part of “surge” strategy. U.S. apparently using new tactic of arming and empowering Sunni factions that vow to resist outside groups such as al-Qaeda. U.S commanders and Iraqi provincial officials met 130 Sunni leaders in Tikrit who agreed to play more active role in defending their province, Salahuddin, against radical insurgent groups. Shiite al-Askari shrine in Samarra again targeted 13 June. Despite calls for calm from prominent Shia cleric, Grand Ayatollah Ali Sistani, 6 Sunni mosques targeted in reprisal attacks. 80 killed in truck bomb attack on Shia mosque in central Baghdad 19 June. Ali Hassan al-Majid, ex-Baath leader in northern Iraq, sentenced to death for role in 1988 Anfal campaign against Kurds.

Both houses of U.S. Congress passed compromise bill 25 May allocating $100bn new funding for Iraq war; no timetable given for U.S. troop withdrawal following President Bush’s veto threat. International Ministerial Conference on Iraq held in Sharm al-Sheikh 3 May. Foreign Ministers of Iraq, its 6 neighbours, Egypt, Bahrain and G-8/P-5, heads of UN, Arab League and Organisation of the Islamic Conference, issued 19-point final consensus statement 4 May but no real progress made beyond initial 10 March meeting in Baghdad. Ambassador-level talks between U.S. and Iran on security situation in Iraq held 28 May. Violence continued throughout Iraq. U.S. troops suffered third worst month since 2003 with over 120 killed. U.S. announced additional deployment of 3,000 troops in Diyala province where use of suspected chlorine bombs continued with 30 killed 16 May. 45 killed by suicide truck bombing of offices of Kurdistan Democratic Party in northern town of Makhmur 13 May.

Suicide attacks and fatalities increased as U.S. military surge lost momentum. Over 200 killed, almost all Shiite civilians, in 5 suicide bombs in Baghdad on 18 April. Suicide bomb in parliament within fortified Green Zone killed 1 MP 13 April, while suicide attack on patrol base near Baqouba 24 April killed 9 U.S. soldiers. Additional car blasts in Baqouba, Ramadi, Mosul 24 April killed 40, in Karbala 28 April killed 55. Sectarian tensions flared in Mosul 22 April as gunmen killed 23 members of Yazidi minority. Muqtada al-Sadr, whereabouts still unknown, organised mass demonstration in Najaf 9 April, demanding timetable for withdrawal of U.S. troops: days later 6 Sadr cabinet members resigned over differences with PM Nuri al-Maliki. Maliki has not supported withdrawal timetable, but ordered halt to U.S. project to build wall around Sunni enclave of Adhamiya. New U.S. envoy, Ryan Crocker, gave first briefing in Baghdad, supported wall project. U.S. Congress approved Iraq spending bill calling for troop withdrawal start by 1 October. U.S. President Bush expected to veto.

U.S. military surge brought reduced violence but suicide bombings continued and month-end saw renewed Shiite retaliation for Sunni attacks. Over 70 killed by blasts 24 March, day after Deputy PM Salam Zaubai injured in bombing in Baghdad in which 9 died. 2 truck bombs hit markets in northern Tal Afar town 27 March, killing 60 and prompting Shiite police to go on revenge shooting spree, killing 70. Tensions mounted in Kirkuk ahead of proposed late 2007 referendum to determine whether governorate will be assimilated into semi- autonomous Kurdish region; 3 car bombs exploded 19 March. U.S. House of Representatives voted 23 March by narrow margin to impose August 2008 deadline for U.S. withdrawal; Senate voted in favour of target date of March 2008; U.S. President Bush promised to veto any bill setting withdrawal timetable. Government announced plans to allow former Baath party members to return to official posts with 3-month period for ex-members to be challenged, after which they will be immune from prosecution for events during Saddam era. Baghdad security conference held 11 March for Iraq’s interested parties in step towards Baker/Hamilton- recommended regional diplomatic engagement.

PM Nouri Maliki launched new U.S./Iraqi security plan for Baghdad 13 February amidst daily car bombs and continued sectarian violence. Anniversary of Samara Shiite shrine bombing (by lunar calendar) 12 February saw 3 bombs detonated in Baghdad markets killing 60; followed deadliest single suicide bombing since war began 4 February, hitting Shiite market and killing 135. UK PM Blair announced 1,600 of total 7,100 troops to withdraw from south in “coming months”. U.S. House of Representatives passed non-binding resolution 16 February against President Bush’s plans to send extra 21,500 troops: Senate Democrats drafting legislation to revoke broad authority granted to president in run up to war. U.S. accused Iran of supplying sophisticated roadside bombs to Shiite insurgents that killed over 170 U.S. soldiers since June 2004; denied by Tehran. Cabinet finally approved draft of new hydrocarbons law 27 February; much needed antidote to centrifugal pressures in Iraq must now be submitted to parliament. Significant shift in U.S. policy as Sec. State Rice announced “new component” in U.S. diplomacy with high-level talks on Iraq security crisis to include Syria and Iran, starting with 10 March regional conference.

U.S. President Bush outlined new Iraq Strategy 11 January amid continuing widespread violence. Plan sees “surge” of 21,500 troops mostly to Baghdad but also restive Anbar province. U.S. Senate Foreign Relations Committee rejected new policy as “not in the national interest” in non- binding vote 24 January. U.S. suffered worst single-day losses 20 January with 25 killed, just as additional 3,000 troops arrived in Baghdad. Iraqi and U.S. troops engaged militants belonging to previously unknown Islamic cult 28-29 January near Najaf; interior ministry claimed over 200 members killed including group’s leader. Botched executions of Saddam Hussein late December and former head of secret police Barzan al-Tikriti 15 January led to further anger from former regime’s followers and Sunni community. PM Nouri Maliki received boost as parliament, including MPs allied to radical Shiite cleric Moqtada Sadr, voted for his new Baghdad security plan; aims to disarm militias and insurgents regardless of religious or political affiliation.