By Patrick Seale

Iraq stands today at one of the most promising moments in its modern history -- but also at one of the most perilous. If Iraqi nationalism asserts itself and if the various communities recognise the need to pull together, the country could be on the path to national revival. But the way forward is strewn with formidable obstacles -- not least the unresolved problem of the American military presence.

Perhaps the most significant outcome of the 30 January elections is that the Iraqis now have a sense of "ownership" of the political process. For the first time in several decades, they are, to a certain extent, masters of their own destiny. The historic task facing Iraq's new political leaders is to manage a peaceful transition from rule by a Sunni minority -- which has been the pattern since Britain founded the state after WWI -- to rule by a Shia majority, which is now on the verge of power through a democratic election but which, in order to govern, needs to find a consensus with other communities and political forces.

The Shia are the big winners of the elections. This is the moment of triumph they have been waiting for. The United Iraqi Alliance, sponsored by Grand Ayatollah Ali Al-Sistani, won 48.1 per cent of the vote, while Iyad Allawi's more secular Iraqi list won 13.8 per cent. These two Shia lists differ on many issues -- including the role of religion in politics, relations with the United States, with Iran, and personal antipathies -- but, together, they won nearly 62 per cent of the votes. The key question is whether the Shia will monopolise power or share it. Will they draw the Sunnis into the political process or keep them out? The answer will largely determine whether Iraq can escape from the present cycle of violence.

The Kurdish Alliance -- made up of Jalal Talabani's Patriotic Union of Kurdistan and Masoud Barzani's Kurdish Democratic Party -- won 25.7 per cent of the vote. It is therefore a major piece in the Iraqi political puzzle. It cannot be ignored. The problem is that the Kurds do not share Iraqi national aspirations. They joined the electoral process in order to shape the future of Iraq to suit their own Kurdish national aspirations.

An unofficial poll, conducted at the time of the elections, revealed that 98 per cent of Iraqi Kurds want independence from Baghdad. Kurdish leaders are less maximalist than their rank and file. But, at a minimum, they want to consolidate the autonomy Iraqi Kurdistan has enjoyed since the first Gulf War of 1991 -- and they want to include Kirkuk and its neighbouring oilfields within their autonomous region. This arouses the fierce opposition of Sunnis and Shias, as well as of Turkmens -- present in large numbers in Kirkuk -- and of Turkey itself.

For the Kirkuk problem to be resolved between Kurds and Arabs, a precondition would probably have to be an agreement on an equitable division of Iraq's oil revenues. Turkey has declared its resolute opposition to any move by the Kurds to seize Kirkuk or to declare independence, fearing that this would arouse secessionist ambitions among its own large Kurdish population. But Turkey's ability to intervene militarily against the Kurds is constrained by the disapproval of both the United States and the European Union. EU membership is, at the moment, Turkey's principal national project. It ranks more highly than a risky intervention in Iraq.

One way of bringing the Kurds half-way back into the Iraqi family would be to appoint the PUK leader, Jalal Talabani, president of the Iraqi republic. This is being actively considered. It could help soften Kurdish perceptions of the Arabs, but much more would be required for confidence between Kurds and Arabs to be restored. The Kurds have painful memories of the 1988 genocide at Saddam Hussein's hands. They will refuse to disband their peshmerga militia, which they see as the main guarantee of their security -- indeed of their survival -- and which is today the strongest local fighting force in Iraq.

Some large measure of Kurdish autonomy is, therefore, probably inevitable, although well short of actual independence. This consideration would seem to point to the creation of a federal, rather than a unitary, Iraqi state, without a strong centre in Baghdad.

Several external factors could disrupt Iraq's progress towards stability. A US confrontation with Iran over the nuclear issue could cause the Islamic republic to make life still more difficult for American forces in Iraq than it is already. Punitive US measures against Syria -- following the assassination of former Lebanese premier Rafiq Al-Hariri -- could induce Syria to strike back, through proxies, in Iraq.

A muscular Turkish reaction to Kurdish aspirations could also spark violence which could spread to other communities. Any of these developments could create tensions in the curious relationship between the Shia leadership and the United States, based at present on a mutually-wary coexistence.

What are American aims in Iraq? Is President George W Bush looking for a face-saving exit from the Iraqi quagmire or do he and his advisers still believe that they can remake Iraq into a "democratic", US-friendly state in which oil, reconstruction and military bases remain in American hands? The debate around this question rages on in Washington and other world capitals.

What seems clear is that the Bush administration has by no means abandoned its initial war aims which were to turn Iraq into a US client state and remove any challenge from Baghdad to America's hegemony in the vital Gulf region.

The 30 January elections have given heart to those in Washington who argue that the situation in Iraq can still be rescued. In any event, the cost in men and treasure has already been so steep that it would be difficult for the United States to walk away without securing some sort of a prize.

Israel's role in the unfolding Iraqi drama must also be considered. Through its friends in the American administration, Israel campaigned for "regime change" in Iraq in pursuit of its long-term goal to weaken Iraq -- in which cause it repeatedly helped the Kurds against Baghdad. The Israeli concern has been to prevent the emergence of a threatening Arab "eastern front", made up of Iraq and Syria.

From the mid-1990s, Israel's neo- conservative friends in the US started agitating for the overthrow of Saddam Hussein, but it was the terrorist attacks of 11 September 2001 which gave them the opportunity to propel this goal to the top of the American agenda. Intelligence was then manipulated and fabricated to make the case for war. Israeli spokesmen freely admit that the destruction of Iraq by the United States has greatly enhanced Israel's strategic environment.

Israel's principal war aim has been achieved: Iraq is shattered. It will be years before it recovers its role as a major Arab power, if it ever does. America's aim, however, of making Iraq into a US client state remains out of reach, and may never be secured. The US has done too much damage in Iraq for its presence, or even its predominant influence, to be acceptable to Iraqis on a long-term basis.

It is often said that, if US forces were to pull out of Iraq in the coming months, the country would collapse into civil war. It is certain that a puppet regime such as Iyad Allawi's could not long have survived an American withdrawal. But now that a more legitimate government is likely to emerge from the recent elections, the threat of civil war seems less acute. On the contrary, the continued American presence would seem to be the main cause of the continued violence.

It is sometimes said that a precipitate American withdrawal would deal a fatal blow to American credibility in the region and encourage terrorists everywhere. But might not the sight of America struggling -- and failing -- to master the insurgency be far more damaging than an early dignified withdrawal? It seems patently clear that there will be no real peace in Iraq until the US departs.