Private security companies will lose their legal immunity. U.S. military operations and the arrest of Iraqis will only be carried out with Iraqi consent. There will be no U.S. military bases left behind when the last U.S. troops leave in three years time and the U.S. military is banned in the interim from carrying out attacks on other countries from Iraq.

The Status of Forces Agreement (SOFA), signed after eight months of rancorous negotiations, is categorical and unconditional. America’s bid to act as the world’s only super-power and to establish quasi-colonial control of Iraq, an attempt which began with the invasion of 2003, has ended in failure. There will be a national referendum on the new agreement next July, but the accord is to be implemented immediately so the poll will be largely irrelevant. Even Iran, which had furiously denounced the first drafts of the SOFA. saying that they would establish a permanent U.S. presence in Iraq, now says blithely that it will officially back the new security pact after the referendum. This is a sure sign that Iran, as America’s main rival in the Middle East, sees the pact as marking the final end of the U.S. occupation and as a launching pad for military assaults on neighbors such as Iran.

Astonishingly, this momentous agreement has been greeted with little surprise or interest outside Iraq. On the same day that it was finally passed by the Iraqi parliament, international attention was wholly focused on the murderous terrorist attack in Mumbai.

For some months polls in the U.S. showed that the economic crisis had replaced the Iraqi war as the main issue facing America in the eyes of voters. So many spurious milestones in Iraq have been declared by President Bush over the years that when a real turning point occurs people are naturally skeptical about its significance.

The White House was so keen to limit understanding of what it had agreed to in Iraq that it did not even publish a copy of the SOFA in English. Some senior officials in the Pentagon are privately criticizing President Bush for conceding so much to the Iraqis, but the American media are fixated on the incoming Obama administration and no longer pays much attention to the doings of the expiring Bush administration.

A U.S. soldier of 46th Engineer Combat Battalion stands guard as teenagers sweep a road in Baghdad’s Fahdil district December 18, 2008. U.S. soldiers visited their reconstruction project in Fahdil district on Thursday. REUTERS/Erik de Castro

The last minute delays to the accord were not really about the terms agreed with the Americans. It was rather that the leaders of the Sunni Arab minority, seeing the Shi’a-Kurdish government of Prime Minister al-Maliki about to fill the vacuum created by the U.S. departure, wanted to barter their support for the accord in return for as many last minute concessions as they could extract. Some three quarters of the 17,000 prisoners held by the Americans are Sunni and they wanted them released or at least not mistreated by the Iraqi security forces. They asked for an end to de-Baathication which is directed primarily at the Sunni community.
Only the Shi’a cleric Muqtada al-Sadr held out against the accord to the end, declaring it a betrayal of independent Iraq. The ultra-patriotic opposition of the Sadrists to the accord has been important because it has made it difficult for the other Shi’a parties to agree to anything less than a complete American withdrawal. If they did so they risked being portrayed as U.S. puppets in the upcoming provincial elections at the end of January 2009 or the parliamentary elections later in the year.

The SOFA finally agreed to is almost the opposite of the one which the U.S. started to negotiate in March. This is why Iran, with its strong links to the Shi’a parties inside Iraq, ended its previous rejection of it. The first U.S. draft was largely an attempt to continue the occupation without much change from the U.N. mandate which expired at the end of the year. Washington overplayed its hand. The Iraqi government was growing stronger as the Sunni Arabs ended their uprising against the occupation. The Iranians helped restrain the Mehdi Army, Muqtada’s powerful militia, so the government regained control of Basra, Iraq’s second biggest city, and Sadr City, almost half Baghdad, from the Shi’a militias. Prime Minister Nouri al-Maliki became more confident, realizing his military enemies were dispersing and, in any case, the Americans had no real alternative but to support him.

The U.S. has always been politically weak in Iraq since the fall of Saddam Hussein because it has few real friends in the country aside from the Kurds. The leaders of the Iraqi Shi’a, 60 per cent of the total population, might ally themselves to Washington to gain power, but they never intended to share power with the U.S. in the long term. The occupation has always been unpopular in Iraq. Foreign observers and some Iraqis are often misled by the hatred with which different Iraqi communities regard each other into underestimating the strength of Iraqi nationalism.

Once Maliki came to believe that he could survive without U.S. military support then he was able to spurn U.S. proposals until an unconditional withdrawal was conceded. He could also see that Barack Obama, whose withdrawal timetable was not so different from his own, was going to be the next American president. Come the provincial and parliamentary elections of 2009, Maliki can present himself as the man who ended the occupation. Critics of the prime minister, notably the Kurds, think that success has gone to his head, but there is no doubt that the new security agreement has strengthened him politically. It may be that, living in the heart of the Green Zone, Maliki has an exaggerated idea of what his government has achieved. In the Zone there is access to clean water and electricity while in the rest of Baghdad people have been getting only three or four hours electricity a day.

Security in Iraq is certainly better than it was during the sectarian civil war between Sunni and Shi’a in 2006-7 but the improvement is wholly comparative. The monthly death toll has dropped from 3,000 a month at its worst to 360 Iraqi civilians and security personnel killed this November, though these figures may understate the casualty toll as not all the bodies are found. Iraq is still one of the most dangerous places in the world. On December 1, the day I started writing this article, two suicide bombers killed 33 people and wounded dozens more in Baghdad and Mosul. Iraqis in the street are cynical about the government’s claim to have restored order. “We are used to the government always saying that things have become good and the security situation improved,” says Salman Mohammed Jumah, a primary school teacher in Baghdad. “It is true security is a little better but the government leaders live behind concrete barriers and do not know what is happening on the ground. They only go out in their armored convoys. We no longer have sectarian killings by ID cards [revealing that a person is Sunni or Shi’a by their name] but Sunni are still afraid to go to Shi’a areas and Shi’a to Sunni.”

Security has improved with police and military checkpoints everywhere but sectarian killers have also upgraded their tactics. There are less suicide bombings but there are many more small ‘sticky bombs’ placed underneath vehicles. Everybody checks underneath their car before they get into it. I try to keep away from notorious choke points in Baghdad, such as Tahrir Square or the entrances to the Green Zone, where a bomber can wait for a target to get stuck in traffic before making an attack. The checkpoints and the walls, the measures taken to reduce the violence, bring Baghdad close to paralysis even when there are no bombs. It can take two or three hours to travel a few miles. The bridges over the Tigris are often blocked and this has got worse recently because soldiers and police have a new toy in the shape of a box which looks like a transistor radio with a short aerial sticking out horizontally. When pointed at the car this device is supposed to detect vapor from explosives and may well do so, but since it also responds to vapor from alcohol or perfume it is worse than useless as a security aid.

Iraqi state television and government backed newspapers make ceaseless claims that life in Iraq is improving by the day. To be convincing this should mean not just improving security but providing more electricity, clean water and jobs. “The economic situation is still very bad,” says Salman Mohammed Jumah, the teacher. “Unemployment affects everybody and you can’t get a job unless you pay a bribe. There is no electricity and nowadays we have cholera again so people have to buy expensive bottled water and only use the water that comes out of the tap for washing.”

Not everybody has the same grim vision but life in Iraq is still extraordinarily hard. The best barometer for how far Iraq is “better” is the willingness of the 4.7 million refugees, one in five Iraqis who have fled their homes and are now living inside or outside Iraq, to go home. By October only 150,000 had returned and some do so only to look at the situation and then go back to Damascus or Amman. One middle aged Sunni businessman who came back from Syria for two or three weeks, said: “I don’t like to be here. In Syria I can go out in the evening to meet friends in a coffee bar. It is safe. Here I am forced to stay in my home after 7 p.m.”

The degree of optimism or pessimism felt by Iraqis depends very much on whether they have a job, whether or not that job is with the government, which community they belong to, their social class and the area they live in. All these factors are interlinked. Most jobs are with the state that reputedly employs some two million people. The private sector is very feeble. Despite talk of reconstruction there are almost no cranes visible on the Baghdad skyline. Since the Shi’a and Kurds control of the government, it is difficult for a Sunni to get a job and probably impossible unless he has a letter recommending him from a political party in the government.

Optimism is greater among the Shi’a.

“There is progress in our life,” says Jafar Sadiq, a Shi’a businessman married to a Sunni in the Shi’a-dominated Iskan area of Baghdad. “People are cooperating with the security forces. I am glad the army is fighting the Mehdi Army though they still are not finished. Four Sunni have reopened their shops in my area. It is safe for my wife’s Sunni relatives to come here. The only things we need badly are electricity, clean water and municipal services.” But his wife Jana admitted privately that she had warned her Sunni relatives from coming to Iskan “because the security situation is unstable.” She teaches at Mustansariyah University in central Baghdad which a year ago was controlled by the Mehdi Army and Sunni students had fled. “Now the Sunni students are coming back,” she says, “though they are still afraid.”

They have reason to fear. Baghdad is divided into Shi’a and Sunni enclaves defended by high concrete blast walls often with a single entrance and exit. The sectarian slaughter is much less than it was but it is still dangerous for returning refugees to try to reclaim their old house in an area in which they are a minority. In one case in a Sunni district in west Baghdad, as I reported here some weeks ago, a Shi’a husband and wife with their two daughters went back to their house to find it gutted, with furniture gone and electric sockets and water pipes torn out. They decided to sleep on the roof. A Sunni gang reached them from a neighboring building, cut off the husband’s head and threw it into the street. They said to his wife and daughters: “The same will happen to any other Shi’a who comes back.”

But even without these recent atrocities Baghdad would still be divided because the memory of the mass killings of 2006-7 is too fresh and there is still an underlying fear that it could happen again. Iraqis have a low opinion of their elected representatives, frequently denouncing them as an incompetent kleptocracy. The government administration is dysfunctional. “Despite the fact,” said independent member of parliament Qassim Daoud, “that the Labor and Social Affairs is meant to help the millions of poor Iraqis I discovered that they had spent only 10 per cent of their budget.”

Not all of this is the government’s fault. Iraqi society, administration and economy have been shattered by 28 years of war and sanctions. Few other countries have been put under such intense and prolonged pressure. First there was the eight year Iran- Iraq war starting in 1980, then the disastrous Gulf war of 1991, thirteen years of sanctions and then the five-and-a-half years of conflict since the U.S. invasion.

Ten years ago U.N. officials were already saying they could not repair the faltering power stations because they were so old that spare parts were no longer made for them. Iraq is full of signs of the gap between the rulers and the ruled. The few planes using Baghdad international airport are full foreign contractors and Iraqi government officials. Talking to people on the streets in Baghdad in October many of them brought up fear of cholera which had just started to spread from Hilla province south of Baghdad. Forty per cent of people in the capital do not have access to clean drinking water. The origin of the epidemic was the purchase of out of date chemicals for water purification from Iran by corrupt officials. Everybody talked about the cholera except in the Green Zone where people had scarcely heard of the epidemic.

The Iraqi government will become stronger as the Americans depart. It will also be forced to take full responsibility for the failings of the Iraqi state. This will be happening at a bad moment since the price of oil, the state’s only source of revenue, has fallen to $50 a barrel when the budget assumed it would be $80. Many state salaries, such as those of teachers, were doubled on the strength of this, something the government may now regret.

Communal differences are still largely unresolved. Friction between Sunni and Shi’a, bad though it is, is less than two years ago, though hostility between Arabs and Kurds is deepening. The departure of the U.S. military frightens many Sunni on the grounds that they will be at the mercy of the majority Shi’a. But it is also an incentive for the three main communities in Iraq to agree about what their future relations should be when there are no Americans to stand between them. As for the U.S., its moment in Iraq is coming to an end as its troops depart, leaving a ruined country behind them.

Patrick Cockburn is the author of “The Occupation: War, resistance and daily life in Iraq,” a finalist for the National Book Critics’ Circle Award for best non-fiction book of 2006. His new book “Muqtada! Muqtada al-Sadr, the Shi’a revival and the struggle for Iraq,” is published by Scribner.