Former President Saddam Hussein executed 30 December. Sentence carried out after appeals court upheld death sentence for crimes against humanity in Dujail case. Execution's sectarian overtones threatened to further deepen ongoing civil war. U.S. forces suffered highest monthly death toll since November 2004 with 109, bringing total to 3,000 since March 2003. Reconciliation conference convened by PM Nouri al-Maliki 16-17 December but key actors such as supporters of radical cleric Moqtada al-Sadr, most insurgent groups and Iyad Allawi’s secular alliance boycotted event. In reversal of U.S.’s ill-fated May 2003 dismantlement of army, al- Maliki announced senior officers of former army allowed to return to armed services or receive pension. Shiite leaders began talks in Najaf with prominent Shiite cleric, Ayatollah Ali al-Sistani, to seek approval for new governing coalition and persuade al-Sadr to rein in his Mehdi Army militia and rejoin political process. New U.S. Defence Sec. Robert Gates met al- Maliki for talks 21 December. Baker/Hamilton Iraq Study Group report released 6 December, highlighting need for new strategy based on regional diplomatic engagement, and strengthening internal governance and national army to enable substantial U.S. troop withdrawal by early 2008. U.S. President Bush convened senior advisers to discuss new strategy.

Sectarian violence rose to worst levels since U.S.-led 2003 invasion. 230 killed in 23 November bomb blasts in Baghdad’s Shiite Sadr City and retaliatory attacks on Sunni mosques 24 November. Spike in violence followed 14 November kidnapping raid by Shiite militia on Sunni-run Ministry of Higher Education and retaliatory attacks on Shiite- run Health Ministry. Moqtada al-Sadr’s Shiite group announced their temporary withdrawal from government in protest at PM Maliki’s meeting with U.S. President Bush in Jordan 30 November. Bush expressed support for Maliki and rejected rumours of U.S. gradual withdrawal. U.S. Defence Sec. Rumsfeld resigned following Republican defeat in mid-term elections; policy shift expected after report by bipartisan Iraq Study Group, due 6 December. Pentagon review of options reportedly favours short-term increase in troops with subsequent reduction coupled with long-term concentration on training and advising. Former President Saddam Hussein received death sentence for crimes against humanity; to appeal verdict. Agreement on restoring diplomatic ties with Syria, suspended for 20 years, announced 21 November.

Sectarian violence and insurgent attacks escalated. U.S. forces reported highest death toll since November 2004 with 103 dead; over 300 Iraqi troops also killed while estimated 40 civilians dying every day. Government postponed national reconciliation conference, citing sectarian violence. Shiite militia loyal to radical cleric Moqtada Sadr clashed with Iraqi police in Amara, leaving at least 30 dead. Majlis Shura al- Mujahidin coalition of some Sunni insurgent groups staged unhindered demonstrations in large towns of western Iraq and announced creation of Islamic State in Sunni Arab heartland and adjacent areas; seen as largely symbolic response to Shiite federalism moves in south. Sunni and Shiite clerics agreed to statement calling for end to sectarian violence 20 October; includes preservation of Iraq's unity, protection of holy sites and release of innocent detainees. Iraqi legislators passed law 11 October establishing mechanism for creating new regions, further deepening fault lines that threaten country’s unity; law cannot be implemented for 18 months due to earlier compromise arrangement. Domestic calls for change in U.S. policy increased ahead of 7 November Congressional elections.

Spike in sectarian violence as holy month Ramadan began. 200 bodies showing signs of torture found near Bagdad while 9 severed heads found north of city. UN expert suggested torture currently worse in Iraq than under Saddam Hussein. U.S. troops enforced 24-hour curfew in Baghdad 30 September after “green zone” security alert. Violence led some observers to conclude PM Maliki’s government lacks political will and capacity to take steps against Shiite groups, including Muqtada al-Sadr’s Mahdi army. UK forces claimed killing of senior al-Qaeda fugitive, Omar al-Farouq, in Basra. Politicians reached agreement to debate legislation allowing creation of autonomous federal regions but postponed implementation for 18 months; one Shiite party supports measure as step toward emulating Kurdish autonomy in north, while Sunnis and most other Shiites opposed due to fear of being cut off from oil revenues or facing Iraq’s break-up.

Acute security problems continued with over 3,300 civilians killed in month - similar to July casualty figures. Top U.S. military commander in Middle East, General John Abizaid, told U.S. Congress Iraq “could move toward civil war” if sectarian violence in Baghdad not stopped. PM Al-Maliki insisted Iraqi forces able to fill vacuum if multinational forces withdraw. Kidnappings, executions and roadside bombs continued in and around Baghdad, including 5 apparently coordinated bombings in southern Baghdad Shiite neighbourhood 13 August killing 57, and gas explosion triggered by car bomb killing 63 day before. Al-Maliki sharply criticisedU .S.-Iraqi attack on Sadr City in Baghdad, stronghold of radical Shiite cleric Muqtada Sadr. Dozens killed in clashes between Iraqi security forces and Shiite militias in southern town of Diwaniya 28 August. Suicide bomber attacked revered Shiite mosque in Najaf 10 August, killing 35. Violence continued in Mosul, Basra and Ramadi. Second trial of Saddam Hussein commenced 21 August concerning 1980’s Anfal campaign against Kurds. Verdict in first trial on 1982 Dujail killings due 16 October.

Ongoing deterioration as U.S. military estimated 40% more major attacks in Baghdad in July than in previous months. Sectarian violence surged with approx. 100 civilians killed per day; 48 slaughtered when mortars fired into market in town of Mahmoudiya south of Baghdad 17 July, and 53 next day by car bomb in Kufa. New PM Maliki’s security strategy, endorsed by President Bush in June, undermined by continuing violence. In trip to Washington and London, Maliki conceded security situation worsened in 2 months since he took charge, and unlikely to improve. Bush announced 4,000 U.S. troops to be redeployed to Baghdad to combat deteriorating security situation there. Iraqi Government and UN announced launch of International Compact with Iraq 27 July: 5-year framework for providing international assistance.

Brutal insurgency and sectarian violence continued throughout country. Al-Qaeda in Iraq leader Abu Musab al-Zarqawi killed in U.S.-Iraqi operation 8 June: replaced by previously unknown Abu Hamza al-Muhajer. Widespread violence included 1 July market blast in Sadr City killing 60. PM Maliki presented national reconciliation plan in attempt to reduce sectarian violence: offers amnesty to some insurgents, militia disarmament and improvement of security forces. Plan welcomed as potential catalyst for talks leading to overall political agreement, but criticised for lack of detail on withdrawal of U.S. troops and amnesty for Saddam Hussein supporters. Mujahideen Shura Council killed 4 kidnapped Russian diplomats. U.S. and Iraqi troops began operation to retake Ramadi city from insurgents 25 June. High profile trials of U.S. troops accused of killing unarmed Iraqis began. Saddam Hussein lawyer shot dead 21 June: third defence attorney killed since trial opened in October 2005.

After 5 months’ negotiations, parliament approved 37- member “unity government” 20 May. 3 main posts of security, defence and interior only with caretaker occupants - including PM Maliki as interior minister - but new government commended for inclusion of Sunnis, Shiites and Kurds. 30 May talks aimed at finding defence and interior ministers ended with no agreement. Security continued to deteriorate with daily car bombs, suicide blasts and discoveries of executed bodies. Violence-related deaths reportedly over 1,100/month in Baghdad with many bodies showing evidence of torture, indicating sectarian revenge killings. 9 UK troops killed amid widespread unrest in south leading Maliki to order month-long state of emergency 31 May.

Deadlock over nomination of PM broken after 2-month stalemate. President Jalal Talabani asked Shiite politician Jawad al-Maliki to form government following decision by PM Ibrahim al-Jaafari to pull out from contest after his nomination rejected by Sunni and Kurdish parties. Maliki, deputy leader of al-Jafaari’s Daawa party, has 30 days to form government. Talabani re-appointed president for further 4 years. Maliki said would integrate militias into security forces despite accusations of widespread execution-style killings and sectarian violence. Situation in Baghdad remained highly unstable: Sunni stronghold Adhamiya district saw frequent clashes, including large-scale, sectarian street battle 18 April; displacement ministry claimed 35,000 fled violence.

Increased anxiety about slide into full-scale civil war with polarised political process, institutional fragmentation and on-going sectarian conflict. U.S. military suggested 30 sectarian killings occurring daily; informal tallies much higher. Iraqi leaders continued high-level talks to form national unity government. Parliament met for first time 16 March, but members took no action in absence of agreement on government. Shiite Alliance chose PM Ibrahim al-Jaafari to lead government but Sunni Arabs and Kurds rejected choice; Alliance said will resist any efforts to drop Jaafari. Iran agreed to talks with U.S. to discuss Iraq. Insurgent attack in Baghdad slum, Sadr City, 13 March killed 52. Police continued to be targeted by insurgents: at least 25 killed in 23 March suicide attack in Baghdad; another police post stormed by insurgents 21 March, killing at least 22. Trial of Saddam Hussein to reconvene 5 April.