Excerpts from a comprehensive review in the UK Independent :
The history of Iraq since the overthrow of Saddam Hussein has been full of fake turning-points - the capture of Saddam in 2003, the supposed handover of sovereignty to Iraqis in 2004, the parliamentary elections and referendum in 2005.
All these events were greeted by the White House and Downing Street at the time as important and encouraging signs of progress, justifying the invasion of 2003. But with every year the war has become more intense. Iraqis are now dying at the rate of about 1,000 a week, according to the UN. Civil war is raging in central Iraq. The war against the US soldiers has also escalated, though American casualties are far lower. The country is awash with blood.
There were two real turning-points of very different kinds in Iraq in 2006: the blowing up of the Shia al-Askari shrine in Samarra on 22 February; and the Republican defeat in the US mid-term elections, in which Iraq was the main issue, on 7 November. The first was the starting gun for the present sectarian bloodbath. The second also had a vast effect within Iraq as the US began to contemplate failure.
In Samarra, nobody was killed by the explosion itself, though it wrecked the great golden dome of the shrine. But the attack led to a Shia onslaught on Sunni Arabs. Shia restraint, already close to breaking point, finally gave way after more than two years of bombs aimed at army and police recruits, who were mostly Shia, as well as at purely civilian targets. Within days, 1,300 people, mostly Sunni, were dead. People caught in the wrong areas at the wrong time were dragged from their cars and slaughtered.
Amid this bloodbath, it is difficult to pick out long-term trends. However, several were clearly visible in 2006:
* There is civil war between Shia and Sunni in central Iraq, and it is getting worse by the day. The most important battle is for control of Baghdad.
* The US is becoming weaker in Iraq because of its evident failure to gain control of the country, and because of the Republicans' defeat in the mid-term elections. The number of Americans who support continuing the war is decreasing.
* The US tried, under its astute and affable envoy Zalmay Khalilzad, to conciliate the Sunni by offering them positions in government, limiting provisions in the constitution they disliked and seeking to talk to the insurgents. The strategy shows little sign of working, and Khalilzad's star is waning.
* The Shia, never comfortable with the US-led forces but prepared to work with the US for their own ends, are increasingly hostile to the occupation. The percentage of Shia who agree with armed attacks on US-led forces rose from 41 per cent to 62 per cent in the first nine months of 2006.
* The US is considering negotiations with Iran and Syria, though this would be a confession of weakness. It also knows that they would look for concessions, such as a US withdrawal and an increase in their regional influence. Sunni powers like Saudi Arabia, Jordan and Egypt are increasingly worried by Shia successes in Iraq and Lebanon.
* The Kurds are losing confidence that Iraq will hold together, though they do not want to be blamed for it coming apart. Kurdistan is the only peaceful part of Iraq.
* The militias grew stronger during the year because the army and police cannot provide security.
Iraq is disintegrating. In areas where there was a mixed population - above all in Baghdad itself - there have been mass killings. After the Samarra bomb, the capital began to divide up into hostile districts, each protected by its own militiamen. The militias themselves became stronger as everybody wanted armed men they could trust at the end of their street. Shia and Sunni families - whichever was in a minority - received letters, often enclosing bullets, telling them to move within 24 hours or be killed. Few dared to stay.
By the end of the year, the UN High Commission for Refugees estimated that 1.6 million Iraqis had fled within the country and another 1.8 million had gone abroad, mostly to Jordan and Syria. At one point, an estimated 1,000 people a day were crossing the border into Jordan and a further 2,000 a day into Syria.Inside Baghdad, it is the Shia who are advancing, using their superior numbers. Sunni are being pushed back into the south and west of the city. But in the furthest outskirts, in dusty towns that were once mixed, the Sunni are on the attack. There is brutal fighting in towns such as Balad, one of the few places with a Shia majority north of Baghdad, and Mahmudiyah, on the main road to the south. The Sunni are increasingly in a position to encircle Baghdad.
The US troops are largely bystanders in this ferocious civil war. Where they do intervene it is usually to defend the Sunni, angering the Shia. It is a nasty feature of present-day Iraqi politics that Sunni, Shia and Kurds all see themselves as victims and have little sympathy for or knowledge of the woes of others. In conversation, they tell of atrocities committed against their own community but scarcely mention the killings perpetrated by their own militias and gunmen. Shia describe their Sunni opponents as "Wahabis" and cat's-paws of Saudi Arabia, while Sunni view Iraqi Shia as pawns of Iran.What options are open to the US? It could reinforce its troops with 20,000 to 30,000 more men, but these numbers add little security in a city the size of Baghdad. It could pull back to its bases, prepared to intervene in support of Iraqi government forces. But these bases depend on vulnerable supply lines. It could pick a fight with the militias, notably the Mehdi army of Muqtada al-Sadr, as it did before in 2004 - it would win militarily, but it cannot eliminate the Sadrists because they are too numerous and too popular.
Negotiations are unlikely to succeed that do not have at their centre an agreement for a timetable for US and British withdrawal. It is their presence in Iraq that is destabilising the region. Their departure should also be unambiguous, with no American bases established inside Iraq.
The US and Britain have argued that this would lead to the Iraqi government unwinding, and would embolden the insurgents. But both these processes are going on already. Sunni resistance to the occupation has created a sympathetic environment for al-Qa'ida-type organisations to flourish in central Iraq. The longer the war goes on, the more entrenched the fanatical Islamic groups will become.
The last justification for keeping US troops in Iraq was that "at least they prevent civil war", but they are failing to do so. It might be useful to have foreign forces acceptable to both sides, but the US and British occupiers do not, in the eyes of Iraqis, have the legitimacy to act as mediators.
The coming year is likely to see the battle for Baghdad intensify. Iraq will probably continue to exist, but as a loose federal state. The Kurds always wanted this; indeed, they would like independence if they dared to take it, but they fear the reaction of Turkey, Iran and Syria.
After the horrors of this year, Sunni and Shia will hardly be able to co-operate closely in future. The sense of Iraqi identity may have been damaged beyond repair. But, more than most states, Iraq is dominated by its capital and Shia and Sunni will continue to fight to rule Baghdad until they either win or know there is no hope of victory.Go Here To Read The Full Story