IRAQ - Other Complications.

Iraq's parliament is to consider a draft law for the petroleum sector approved on Feb. 26 by the cabinet. Nationalists are against the draft, fearing Iraq's petroleum wealth will be controlled by IOCs. Even before the US invasion, nationalists in the Arab world have been suspicious of the US motive, arguing America was after Iraq's petroleum (see Part 13 in ood3-IraqPetroleumLawMar19-07).

Even by Baghdad standards, the April 12 Neo-Salafi bombings were shocking. Mayhem in the parliament building and the disabling of a key bridge over the Tigris River illustrated the dim prospect of a military solution. On April 9, a peaceful event delivered an equally potent message as tens of thousands of Shi'ites in Najaf protested the US occupation, with Iran posing an increasingly serious challenge over its nuclear and geo-political ambitions (see sbme4-IraqUS-IranNukeIssueApr16-07 and rim4-IraqHandlingShi'iteExtremismApr9-07).

The Najaf demonstration was a show of influence by Sadr. Just before the Najaf event US forces clashed with his Jaysh al-Mahdi in Diwaniya near Baghdad. One signal sent by the crowds in Najaf was that the US should not push too hard against Jaysh al-Mahdi as Sadr's lieutenants pointedly boasted that his militia had grown three-fold since being routed by the Americans in Najaf in 2004. By including a smattering of Sunni clerics and Kurds in the May 9 protest, and by stressing a nationalist rather than a sectarian theme, Sadr was warning the US that a serious attack on his forces would be tantamount to attacking all patriotic Iraqis.

Sadr was also sending a message to the Shi'ite clerical establishment that he was too powerful to be ignored. By making a show of his base and his Iran backing, Sadr is seeking to be recognised as first among his peers. As the Boston Globe recently put it, "Sadr's street theater in Najaf offers a lesson for US policymakers: a tolerable exit from Iraq will require that they learn to play the complex, many-sided game of Iraqi politics".

Added to all this was a boast on April 17 by Abu Omar al-Baghdadi that his Neo-Salafi "caliphate" was producing its own long-range rockets in Iraq, announcing the "Quds-1" as being its latest. But experts dismiss that as mere wishful thinking, because US and Iraqi forces have dislocated Neo-Salafis from their Anbar Province stronghold where local tribes have rebelled against them. Yet the Neo-Salafi threat has become a major issue threatening the Mediterranean basin and Europe (see news17-QaedaApr23-07).

Baghdadi said in an audiotape posted online his Qaeda-linked group had "moved into the phase of military production with an advanced degree of range and accuracy". Insurgents in Iraq have used a range of Soviet-era rockets like Katyushas, and shoulder-fired ground-to-air SAM-7 missiles - mostly looted from Saddam's massive depots in the lawless days and weeks after the collapse of his regime. Recently the US said Iran was funnelling Iranian-made weapons to insurgents in Iraq - mostly to Shi'ites but to some Sunnis as well. Iran was also sending arms to the Taliban in Afghanistan.

A series of Neo-Salafi car bomb attacks on April 18 killed over 200 people. They followed a week of increased violence, threatening to undo progress made by US and Iraqi troops over the past two months in curbing a cycle that saw explosions targeting mostly Shi'ite civilians. A car bomb detonated in a Shi'ite market in Sadriya killed 140 people and wounded 150. The market had been hit by car bombers in February when an attack killed 137. Other bombs on April 18 exploded at a police checkpoint, outside a hospital, and on a minibus.

The car bombs - at least five - cast doubt on April 18 claims by Maliki that Iraqi officials should be able to take over security in all of Iraq's 18 provinces by end-2007. Maliki's statement had been issued to mark the handover of the governorate of Maysan in the south by British forces to provincial officials, the fourth such province to be handed over since mid-2006.

On April 17, Maliki said the government was holding talks with some insurgent groups, including members of Saddam's regime, as part of a reconciliation plan. He did not name the groups, but said when a conference on Iraq is held on May 3-4 in the Egyptian resort of Sharm el-Shaikh, "We will have good chances for reconciliation". Iraq's neighbours and other countries are to attend the ministerial meeting.