By Hannes Artens

With the battles of Basra and Mosul fought, the security situation in Iraq has temporarily improved - far from stabilized - and the once declared dead al-Maliki government has gained ground at home and abroad. The insanity of an attack on Iran aside, Iraq's biggest challenges at present are political - a fact, Ambassador Crocker and General Petraeus never get tired of pointing out and demanding in colonialist grandeur the savage Iraqis to finally get their act together. And yet it is Washington who turns out the most formidable obstacle for an improvement on the political front. Not only that the Bush administration has dropped the biggest imaginable diplomatic brick by pushing for the Status of Forces Agreement, it also does very little to deescalate the most severe constitutional challenge to Iraq's territorial integrity.

In five days the six-months postponement of a referendum on the future status of Kirkuk the Kurdish Regional Government (KRG) has agreed to in December will expire. The U.N. Assistance Mission for Iraq (UNAMI) has initiated rounds of talks to save the north from a potential cross-border war and to provide all parties in the standoff on Kirkuk with an alternative to a referendum likely to result in carnage and a means to save face when considering another postponement. With the struggle over the future status of Kirkuk having entered its decisive phase, UNAMI's initiative would require all the political backing from Washington it can get. But the Bush administration is instead gambling away all its political fortune with the ill-fated and -timed security deal and thus risking the ultimate disintegration of Iraq.

While the KRG enjoys constitutionally recognized authority over the three northern provinces of Erbil, Dohuk, and Sulaymaniyah, it also controls significant parts of Diyala, Kirkuk, and Niniveh, each with a substantial, if not majority, Kurdish population. The question of the final borders of the KRG is addressed in Article 140 of the Iraqi constitution. Designed to reverse the ethnic cleansing of the Saddam era, it stipulates that Arab settlers be returned to the south, and provides that a census, and ultimately a referendum, be held in disputed areas. Along the so-called "green line" that separates the Kurdish zone of influence from that of the Iraqi government, the oil rich city of Kirkuk proves the biggest bone of contention. While all three ethnic groups that were victims of Saddam's Arabization campaign -- Kurds, Turkomans and Assyrians -- see Kirkuk as the capital of their historic territories, the Kurds are the only group that has publicly pressed for a referendum. They see the incorporation of Kirkuk into the KRG as a means to right the wrongs of the past and a necessary precondition for national reconciliation.

Arabs, Turkomans and Assyrians, however, cling to the status quo. They believe their minority rights would be better protected by Baghdad's multiethnic central government than by the Kurdish administration in Erbil. Neither they, nor the Iraqi government, are content to convey Kirkuk's oil riches, estimated at 10 billion barrels of reserves, to the KRG. Baghdad fears that ceding control over Kirkuk would provide the Kurds with the economic wherewithal for eventual secession.

Given the explosiveness of the situation -- there could be significant confrontations simply over the terms for conducting a census -- all parties involved, even the KRG, might prefer to quietly freeze the status quo. Yet among the Kurdish population of Kirkuk, the KRG has become hostage to its own martial rhetoric. It is expected to live up to its lofty promises and not again to easily yield to external pressure. When in December 2007 the U.N. Special Representative for Iraq, Staffan de Mistura, negotiated a six-month postponement of the referendum, a Sunni-Shiite Arab parliamentary alliance immediately exploited this Kurdish concession by declaring that in consequence Article 140 had expired altogether. For the Kurds, this was a well-learned lesson for future negotiations, as the six-month reprieve ends in July.

Furthermore, radicals on both sides, whether Sunni militants or Ansar al-Islam, are hell bent on making the most of the simmering tensions to regain ground in the region. Recently, violence in Kirkuk has escalated significantly. "The trouble is, doing nothing in Kirkuk is almost as bad as doing something," The Economist quoted a Western diplomat as saying.

Enter the United Nations. "Kirkuk needs to be solved through a political formula in which everybody, majorities and minorities, feels comfortable," de Mistura said in April, expressing his hope of finding a political alternative to a referendum likely to spark carnage. His mid-term strategy is to negotiate compromise on other, less contentious territorial disputes along the "green line." On June 5, after a three-week delay, UNAMI made its first proposal to the Iraqi government for resolving the disputes over various district boundaries. Under the proposal, Akre district in Nineveh province would be ceded to Dohuk, Makhmour to Erbil, Hamdaniya would remain within Nineveh, and Mandali would become part of Diyala province.

Such a reciprocal territorial swap and redrawing of provincial borders, if accompanied, as the report suggests, by a set of confidence building measures (development projects, protection and possible compensation for minorities, etc.) may create a win-win situation for Kurds and Sunni Arabs and would establish much needed trust between the main antagonists. These measures and the methodology used to determine the allocation of the districts -- administrative history, demographics, 2005 election results, economic and security conditions, the provision of government services, etc. -- could also serve as a model for tackling the future status of Kirkuk proper.

The initial response to UNAMI's presentation was mixed at best. While Iraq's notoriously anti-federalist, Sunni Arab Vice President Tariq al-Hashimi is believed to have contributed to the three-week delay, and leading representatives of Kirkuk's Arab population have outright rejected the proposal. Tthe KRG's Prime Minister, Nechirvan Barzani, on the other hand, has indicated that the Kurds may agree to an alternative to a referendum -- a new flexibility warmly welcomed in the Turkoman media. On June 7, however, 95 Iraqi lawmakers from various political blocks put forward an official protest, rejecting the U.N.'s recommendations and its role as a mediator.

The inter-Iraqi feud is exacerbated by external actors. The Turkish government, notoriously wary of any increased power for the KRG, sees itself as a protector of Iraq's Turkoman population. On the other hand, economic ties between Ankara and Erbil have recently blossomed, rendering Turkey the largest foreign investor in Iraqi Kurdistan. And, as demonstrated during the Turkish incursion into northern Iraq in February, even the Turkish military has to acknowledge that keeping the insurgent PKK contained is best achieved by strategic cooperation with the KRG. Likewise, Erbil has realized that the future of a prosperous, quasi-independent Iraqi Kurdistan lies with Turkish investors rather than Marxist guerillas who are increasingly losing popular backing at home.

Washington has the most to lose from a showdown over Kirkuk. The very Arab tribal sheiks who lead U.S.-funded militias in the Kirkuk governorate and form the backbone of the Sunni Awakening movements have threatened to turn their weapons against the Kurdish peshmerga in defense of Kirkuk. A Kurdish-Turkish-Arab clash over Kirkuk would vitiate all the security gains of the "surge" and turn the three major U.S. allies in the region against each other, forcing Washington to pick a side -- a sure recipe for disaster.

But Washington is also the external actor with the strongest leverage on all parties. The autonomous state of Iraqi Kurdistan would not survive a single day without its American friends; Turkey on the verge of the most severe constitutional crisis in its history can't afford to antagonize its closest ally; neither would the Awakening movements and Sunni coalitions risk losing their American-taxpayer-financed pampering and newly gained political power. So much for theory. In reality, Washington stubbornly refuses to apply any lessons learned from the fatal viceroyship of Paul Bremer and the catastrophic policy of de-Baathification. In good old ethnic divide and conquer fashion, the Bush administration, tempted by the "surge's" success and the resulting US-Sunni rapprochement, has chosen the "Sons of Iraq" as their current sweetums while weakening the al-Maliki government with the Status of Forces Agreement, upsetting Shiites with its 24/7 saber rattling against Iran, and cold-shouldering the Kurds on Kirkuk - the notorious Michael O'Hanlon, for example, is issuing dire threats warning the Kurds not to overplay their hands with Kirkuk.

UNAMI's proposal not only proves the most viable option put forward in years to brake the stalemate on Kirkuk, it would also provide Washington with the opportunity to establish itself as an honest broker and supporter of negotiated compromises instead of constantly exploiting Iraq's ethnic divides for its own ends. Instead of recklessly presenting his successor with a fait accompli and foolishly laying the ground for a hundred-years US troop presence in Iraq, President Bush may consider for his legacy to build on the security gains made and throw his weight behind a negotiated compromise on Kirkuk. If not, Kirkuk may become Iraq's next ethnic frontline and bury all accomplishments of the past ten months.

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Hannes Artens is the author of The Writing on the Wall, the first anti-Iran-war novel.