Can Iraq's new calm hold?

After more than a year of taking a wait-and-watch approach to the surge of US forces in Iraq, military commanders and independent experts now seem more confident that it could be the beginning of the end for the insurgency in Iraq.

If this month's trend holds, July could see fewer American fatalities in Iraq than any other month since the war began in March 2003.

"This is the way insurgencies end," said Jack Keane, a retired four-star general who recently returned from Iraq, at an event in Washington last week. "They just sort of fade away."

But elation about the improved security is tempered with lingering concerns about whether the relative calm in Iraq can become more permanent.

Top US commanders have said the surge of forces will have met their goals only if the improved security on the ground is "irreversible." The fear remains that the gains could all slip away if the Iraqi government doesn't cement the progress with political reconciliation on key issues and an increased level of governance.

The Government Accountability Office warned earlier last week that with the new- found security in Iraq, the US now needs a new strategy. The report noted that surge of forces, the last brigade of which returned home this month, is now over, and the war in Iraq is entering another phase.

As Gen. David Petraeus prepares to move to his next post at US Central Command and Gen. Ray Odierno succeeds him in Iraq, the GAO says there is the need for a new plan.

Only ten of 18 provincial governments hold lead responsibility for security, the report said. And, according to the Defense Department, less than 10 percent of Iraqi security forces were at the highest levels of readiness and therefore capable of conducting military operations without US support, the GAO report noted.

More than 75 percent of Iraqi battalions are "in the lead," according to Mr. Keane, but their ability to operate without the American military is still hamstrung by their inability to perform their own logistical operations.

While the government of Iraq has passed major legislation, the report notes that there is still disagreement over key issues such as sharing of Iraq's vast oil revenues, disarming militias, and holding provincial elections, scheduled for this fall.

The Iraqi government also still has a problem spending its money: the GAO said that it spent only 24 percent of the $27 billion it budgeted for reconstruction efforts between 2005 and 2007. But with increased security on the ground, defense officials say it has begun to spend more of its own money.

Ultimately, when it comes to handing security responsibilities over to Iraq, one of the biggest questions is what will become of the "Sons of Iraq" – the Sunni-dominated groups that form a neighborhood watch program for some of Iraq's most volatile areas and that number more than 103,000 individuals, each paid a daily wage by the US.

These groups are considered an important factor in the improved security situation in Iraq. But since the program was implemented along with the surge strategy last year, the fear has long been that when the US money runs out, those individuals will return to violence.

As many as 30 percent of the "Sons" are supposed to be professionally trained and folded into the Iraqi security forces. The rest are supposed to be given jobs. But the Iraqis have for months been wary of accepting them into the security forces. The Iraqis' failure to reach political accommodation on this could leave the program adrift and reverse security gains in some areas, experts say.

In northern Iraq, for example, Maj. Gen. Mark Hertling says he hopes that by November, half of the 32,000 "Sons of Iraq" in his sector are either given jobs or accepted into the Iraqi security forces. Of those, he hopes many will become police.

"If we can get 10 percent of them hired as Iraqi policemen, I'll be very happy," said General Hertling in an interview earlier this month. Integrating the rest into the local economy is made difficult by the lack of a rule of law that would govern contracts and other economic transactions, Hertling says.

"I think we're in the very early stages of making that happen," he said. "When that does occur, it will go gangbusters."

But American coffers can't keep footing the bill, defence officials say. Yet Iraqis are not confident the political will needed for an agreement exists.

"I have not seen a coherent plan for those guys, what to do with them," says former Iraqi Prime Minister Iyad Allawi, who visited Washington last week. An agreement should have been decided before the program was even begun, Mr. Allawi says.

This week, three suicide bombers, all female, were responsible for separate attacks that killed more than 60 people in Baghdad and the northern city of Kirkuk. Meantime, Iraqi and American forces began an operation against Al Qaeda forces in Diyala province, where top commanders say violence is down but where fighting nonetheless remains intense.

"We've still got a good fight going on," Hertling said. "I don't think the Iraqi people are completely secure. It is not yet a day at the beach for them."