Thread: Iraqi/Dinar news until March 1st, 2007

Baghdad-WTO
Iraq to join WTO, says U.S. source
By Hadi al-Hadi
Baghdad, Feb 24, (VOI) – Iraq's government has fulfilled all requirements and procedures to apply for the membership of the World Trade Organization (WTO), a USAID official in Baghdad said on Saturday.
"The Iraqi government is now getting ready to have its first dialogue with WTO in April 2007 in Geneva, Switzerland," Greg Howell, Director of Private Sector Development at the U.S. Agency for International Development (USAID), said in a press conference.
Howell said "Iraq had applied in 2004 to obtain WTO membership. A task force was set up to study the application and coordinate with the Iraqi government over reforms in trade policies and requirements for accession."
"Iraq's WTO membership would guarantee Iraqi commodities and services undistinguished access to global markets and it would also give a strong sign to re-merge Iraq into the international community," the USAID official noted.
He said this membership would as well bring Iraq more stable trade relations, enhanced income, stimulated economic growth, more jobs and less corruption.
AE

The government of the territory Cordstan examine the results of the negotiations Brother lira on the oil-Irbil fraternity : headed by Mr. Barzani Najirfan head of government less Cordstan happen, and in the presence of Mr. Omar Fatah, deputy board chairman a Ministers of the Council of Ministers of its territory Cordstan Ala Tiadeh, The meeting discussed the results of recent talks among the delegation the government of the Iraqi Federal Cordstan the Law on Oil and progress has been made in this Als dd, along with the outcome of the commercial gate to the rugged s, which was held in Irbil, reviewed the importance of this conference. The meeting also discussed the proposals and projects Law faith of the ministries included in the meeting agenda. It was decided to form Kaemmagamiat al-Qarah Hammarskjöld be a center Here in the town of Sayed Sadiq Kardag, and is located in the town of S. by Sadiq.

Originally Posted by DinarDevildog

Baghdad-WTO
Iraq to join WTO, says U.S. source
By Hadi al-Hadi
Baghdad, Feb 24, (VOI) – Iraq's government has fulfilled all requirements and procedures to apply for the membership of the World Trade Organization (WTO), a USAID official in Baghdad said on Saturday.
"The Iraqi government is now getting ready to have its first dialogue with WTO in April 2007 in Geneva, Switzerland," Greg Howell, Director of Private Sector Development at the U.S. Agency for International Development (USAID), said in a press conference.
Howell said "Iraq had applied in 2004 to obtain WTO membership. A task force was set up to study the application and coordinate with the Iraqi government over reforms in trade policies and requirements for accession."
"Iraq's WTO membership would guarantee Iraqi commodities and services undistinguished access to global markets and it would also give a strong sign to re-merge Iraq into the international community," the USAID official noted.
He said this membership would as well bring Iraq more stable trade relations, enhanced income, stimulated economic growth, more jobs and less corruption.
AE

Holy cr@p, it is actually going to happen. Uh........not that I didn't believe it before, but it is pretty wild to see it happen just like we have all been speculating for the last few months.....

This is a huge deal. Even if it is a repost I missed it earlier, thanks DinarDevilDog.

Originally Posted by TerryTate

Holy cr@p, it is actually going to happen. Uh........not that I didn't believe it before, but it is pretty wild to see it happen just like we have all been speculating for the last few months.....

This is a huge deal. Even if it is a repost I missed it earlier, thanks DinarDevilDog.

It says they fulfilled rquirements to apply, it also says they applied in 2004, so what happened in 2004?

Originally Posted by arvie

It says they fulfilled rquirements to apply, it also says they applied in 2004, so what happened in 2004?

Notes for Editors

1. Iraq applied for observer status in January 2004. Observer status allows Iraq to attend the internal deliberations of all WTO bodies, to learn WTO rules and procedures and to qualify for training assistance.

2. Iraq has already brought many of its trading rules into conformity with the WTO. Adoption of WTO provisions and liberalising tariffs and trade in services, in the context of working towards WTO membership, will support ongoing efforts for economic reform in Iraq and fuller integration into world markets.

3. Eventual membership of the WTO will help Iraq to reach important economic goals such as achieving sustainable growth, promoting industry, attracting foreign investment, raising living standards and asserting national trade interests worldwide.

You dont just get in the WTO overnight. It takes a long time from what I understand. THey have to do a full evaluation of your country and what it has to offer and what protects the assets it has to offer.

ACCESSIONS

Iraq

A request for accession under Article XII was received by the Director-General of the WTO on 30 September 2004. A Working Party was established at the General Council meeting on 13 December 2004. Iraq submitted a Memorandum on the Foreign Trade Regime in September 2005, Foreign Trade Regime in September 2005, followed by Replies to Questions raised by Members in November 2006. The Working Party has not yet met.

everything that we have seen with the WTO is definetly great news for us, We are there family RV is right around the corner.

Western institutions grant degrees in banking Wallace for the illiterate?

Yasser incumbent
Company announced Cup Business School and the London-based on their own b the launch of the first program to a master's degree program in services Islamic banking in the world in Dubai. Yet we are with this development, which reflects the attention of the world Pa the method of Islamic particularly in the area of money, but we Ntsa Where are told Arab universities, which are the closest of Aljama T. West in this specialization of this activity?

What prompted universities to enter the world in this Nash pertaining is significant growth and accelerating in the banking sector only inevitably of safety and the importance of this program lies in that Seth pw executive officials in the Islamic banks x Yar pursue higher studies soon of a well, the bank is a suitable opportunity to obtain higher education Luba Promoted levels without having to travel to the outside without raid.
It is useful to recall that cup Business School is one of j companies specialized in the presentation of educational services abolished mound said the program will start in cooperation with the Center global financial Dubai in September of 2007, which not sank 24 months.

The contexts, which will discuss is the same place in the Institute's headquarters in London, the holder of an advanced level in accordance to classify the Financial Times, professors will talk from London to teach students Master of Dubai and continue communications through a gate Ka o ring for electronic education. With the company managed success in the similar program, which was set up by Baltao n financial position with the President in China "Shingha.

It made us wonder if the need for such activity air August to educational institutions and those involved in the sector Islamic banking. As regards Iraq, we believe that the banking sector in the Mainland Math need to rehabilitate workers and correcting village n and regulations to cope with the international development on one hand and preparing the explosive development expected after the imposition of a plan to achieve the success required.

Translated version of http://www.alsabaah.com/

Cheers!
DayDream

Originally Posted by DayDream

Western institutions grant degrees in banking Wallace for the illiterate?

Yasser incumbent
Company announced Cup Business School and the London-based on their own b the launch of the first program to a master's degree program in services Islamic banking in the world in Dubai. Yet we are with this development, which reflects the attention of the world Pa the method of Islamic particularly in the area of money, but we Ntsa Where are told Arab universities, which are the closest of Aljama T. West in this specialization of this activity?

What prompted universities to enter the world in this Nash pertaining is significant growth and accelerating in the banking sector only inevitably of safety and the importance of this program lies in that Seth pw executive officials in the Islamic banks x Yar pursue higher studies soon of a well, the bank is a suitable opportunity to obtain higher education Luba Promoted levels without having to travel to the outside without raid.
It is useful to recall that cup Business School is one of j companies specialized in the presentation of educational services abolished mound said the program will start in cooperation with the Center global financial Dubai in September of 2007, which not sank 24 months.

The contexts, which will discuss is the same place in the Institute's headquarters in London, the holder of an advanced level in accordance to classify the Financial Times, professors will talk from London to teach students Master of Dubai and continue communications through a gate Ka o ring for electronic education. With the company managed success in the similar program, which was set up by Baltao n financial position with the President in China "Shingha.

It made us wonder if the need for such activity air August to educational institutions and those involved in the sector Islamic banking. As regards Iraq, we believe that the banking sector in the Mainland Math need to rehabilitate workers and correcting village n and regulations to cope with the international development on one hand and preparing the explosive development expected after the imposition of a plan to achieve the success required.

Translated version of http://www.alsabaah.com/

Cheers!
DayDream

WOOT! LOVE IT!

Date: Fri, 23 Feb 2007 10:21:40 -0500
From: [email protected] Add to Address Book Add Mobile Alert
Subject: Section 1227 Report on Iraq (html)
To: [email protected]
Section 1227 Report on Iraq (html)

Report to Congress

Submitted pursuant to U.S. Policy in Iraq Act, Section 1227 (c) of the
National
Defense Authorization Act for Fiscal Year 2006 (PL 109-163)

January 5, 2007

Table of Contents

Introduction

I. The current military mission and the diplomatic, political,
economic, and
military measures that are being or have been undertaken


(A) Efforts to convince Iraq's main communities to make the
compromises
necessary for a broad-based and sustainable
political settlement

(B) Engaging the international community and the region in efforts
to
stabilize Iraq and to forge a broad-based and
sustainable political settlement

(C) Strengthening the capacity of Iraq's Government ministries

(D) Accelerating the delivery of basic services

(E) Securing the delivery of pledged economic assistance from the
international community and additional pledges of assistance

(F) Training Iraqi Security Forces and transferring additional
security
responsibilities to those forces and the Iraqi Government

II. Whether the Iraqis have made the compromises necessary to achieve
the
broad-based and sustainable political settlement that is essential for
defeating the insurgency in Iraq

III. Any specific conditions included in the April 2005 Multi-National
Force -
Iraq campaign action plan and any subsequent updates to that campaign
plan that
must be met in order to provide for the transition of additional
security
responsibility to Iraqi Security Forces

IV. Additional information on military, policy, and security forces:


(A) The number of battalions of the Iraqi Armed Forces that must be
able to
operate independently or to take the lead in counterinsurgency
operations
and the defense of Iraq's territory

(B) The number of Iraqi special police units that must be able to
operate
independently or to take the lead in maintaining law and order in
fighting
the insurgency

(C) The number of regular police that must be trained and equipped
to
maintain law and order

(D) The ability of Iraq's Federal ministries and provincial and
local
governments to independently sustain, direct, and coordinate Iraq's
security

V. The criteria to be used to evaluate progress toward meeting such
conditions

VI. A plan for meeting such conditions, an assessment of the extent to
which
such conditions have been met, information regarding variables that
could alter
that plan, and the reasons for any subsequent changes to that plan
-------------------------------------------------------------------------------

Introduction

This report is submitted pursuant to Section 1227(c) of the National
Defense
Authorization Act for Fiscal Year 2006 (Public Law 109-163) concerning
United
States Policy in Iraq. The report covers the security, political, and
economic
measures that are being or have been undertaken primarily during the
reporting
period October 7, 2006 - January 5, 2007 (for convenience, referred to
here as
the Fourth Quarter of 2006). Against a backdrop of heightened sectarian
violence, the President announced his new strategy for Iraq, and based
on his
revised plan, the ensuing report to Congress will reflect those
changes.

Following this introduction, this report is organized into the
following
sections: (1) the current mission in Iraq and measures taken to support
it; (2)
Iraqi progress towards a sustainable political settlement; (3)
conditions
necessary for a transfer of security responsibility to Iraqi Security
Forces
(ISF); (4) ISF capacity and readiness; (5) criteria used to evaluate
progress
in that area; and (6) our plan for successfully completing the mission.

The focus of United States policy in Iraq remains on helping the Iraqi
people
build a constitutional, representative government that respects the
rights of
all Iraqis and has security forces capable of maintaining order and
preventing
the country from becoming a safe haven for terrorists and foreign
fighters. The
ultimate goal is an Iraq that is peaceful, united, stable, democratic,
and
secure, with institutions capable of providing just governance and
security for
all Iraqis. These goals will require the integrated efforts of the
United
States Government, the Government of Iraq (GOI), governments of
Coalition
states, and the active participation of the United Nations, other
international
organizations, and regional states. As noted in the National Strategy
for
Victory in Iraq (NSVI), U.S. policy outlines goals and measures
progress along
three tracks: security, political, and economic.

Security Track

Security in Iraq worsened during the reporting period, especially in
and around
Baghdad. Following the February 22, 2006, bombing of the al-Askariya
Shrine in
Samarra, sectarian violence rose markedly. During the fourth quarter of
2006,
more than half of all attacks against Iraqi nationals occurred in two
of Iraq's
18 provinces, Baghdad and Anbar. Although there are no firmly agreed
upon
casualty figures, most observers agree the violence was at its worst
during the
month of Ramadan, which began October 4, 2006, when hundreds died each
week,
mainly in Baghdad. Following a relatively peaceful Eid al-Fitr,
violence also
peaked again later in November 2006 as insurgents continued their
efforts to
stoke intercommunal strife.

Throughout this period Coalition Forces (CF) sought to assess, adapt,
and
revise their efforts to work with the ISF to help set the conditions
for
improved security self-reliance. U.S. forces and international partners
are
also making the transition from a leadership role to a role of support
and
assistance to Iraqi security forces. In October 2006, President Bush
and Iraqi
Prime Minister al-Maliki agreed to form a high-level working group
dedicated to
accelerating the pace of achieving three common goals: training of the
ISF,
Iraqi assumption of operational control of its military forces, and
transfer of
security responsibilities to the GoI.

Iraqi forces have increasingly taken command and control responsibility
and the
operational lead of their security forces. During this reporting
period, the
Multi-National Corps-Iraq (MNC-I) made the third transfer of a major
Army
division to Iraqi Ground Forces Command (IGFC), returning command and
control
responsibilities of the 3 rd Iraqi Army Division. The IGFC, as
commanded by the
Iraqi Joint Headquarters, currently commands the Iraqi Navy, Iraqi Air
Force
and three of ten Iraqi Army Divisions. Security responsibilities for
the Najaf
province were transferred to the Iraqi provincial governor and the
Iraqi
police, making it the third province whose security has returned to
Iraqis.

The ISF have assumed more security responsibility and demonstrated an
increasing capability to plan and execute counter-insurgency
operations. As of
December 27, 2006, there were 8 division Headquarters, 31 Brigade
Headquarters,
and 92 Iraqi Army battalions that had been assigned their own areas for
leading
counter-insurgency operations. The Multi-National Security Transition
Command-Iraq (MNSTC-I) has trained over 323,000 Iraqi forces.

The Coalition is focusing on improving the proficiency of all Ministry
of
Defense (MOD) and Ministry of the Interior (MOI) units, primarily
through the
efforts of Military, Police, National Police, and Border Transition
Teams.
These 420 teams, composed of 6,000 international advisors, are embedded
at all
levels of Iraqi units in all major subordinate commands. The Coalition
multinational division provides for approximately 15 percent of all
teams; the
United States provides the remainder.

Political Track

On the political track during the fourth quarter of 2006, Iraq made
some
progress against a background of escalating violence. However, many
critical
political obstacles, especially concerning national reconciliation,
remain.

In September, 2006, Iraq's Political Committee on National Security
(PCNS)
agreed upon a set of political, security, and economic benchmarks. The
Presidency Council reaffirmed the benchmarks on October 16, 2006.
However,
progress against these benchmarks has been limited so far. The Iraqi
government
began the process of a constitutional review through the establishment
of the
Constitutional Review Committee led by three of Iraq's most noted
constitutional drafters and legislators. The GOI also completed the
third of
four national dialogue conferences, and a number of leading political
figures
began discussions to form a moderate political front to counter
extremists.

On November 5, 2006, the Iraqi High Tribunal (IHT) rendered its
judgment in the
Dujail trial of Saddam Hussein and seven co-defendants. After having
heard 38
days of testimony from dozens of witnesses, Saddam Hussein's trial
ended. He,
along with co-defendants Barzan al-Tikriti and Awad al-Bandar, were
sentenced
to death by hanging. Former Iraqi Vice President Taha Ramadan was
sentenced to
life in prison, while four other defendants were sentenced to 15 years
in
prison. One defendant, Mohammed Ali, was acquitted. The verdict was
appealed to
the IHT Appeals Court, which upheld the official judgment on December
26, 2006.
Following a long, public trial that met international standards, Saddam
Hussein's death sentence was carried out December 30, 2006 in a hanging
widely
criticized for its sectarian overtones.

On the international political stage, the United Nations Security
Council
(UNSC) unanimously approved UN Security Council Resolution 1723 on
November 28,
2006, extending the mandate of the Multi-National Force-Iraq (MNF-I)
for an
additional year.

Provincial Reconstruction Teams (PRTs) are playing an increasing role
in
assisting the transition in Iraq. PRTs work closely with provincial
council
members, governors, local officials, community leaders, and criminal
justice
system officials to help them improve the implementation of provincial
government responsibilities, to help build a fair and transparent
justice
sector, and to increase participation of private citizens in the
governmental
decision-making process. PRTs have been instrumental in working with
local
communities, assessing and reporting on local issues, and facilitating
political relationships. PRTs are designed to provide a link between
provincial-level and national-level efforts.

Ten PRTs are currently operational. The United States leads seven PRTs:


(1) PRT Tamim (Kirkuk),
(2) PRT Ninawa (Mosul),
(3) PRT Babil (Hillah),
(4) PRT Baghdad,
(5) PRT Anbar (Ramadi),
(6) PRT Diyala (Baquba), and
(7) PRT Salah ad-Din (Tikrit).

The United Kingdom leads PRT Basrah, and the Italians, who characterize
their
operation as a Reconstruction Support Unit, lead in Dhi Qar
(Nasiriyah). The
inauguration of the Korean-led Regional Reconstruction Team (RRT) in
Irbil in
January 2007 completed the slate of three Coalition-led PRTs. The U.S.
Government also has established six Iraqi-staffed PRTs for Najaf,
Karbala,
Wasit, Qadisiyah, Maysan, and Muthanna. However, these PRTs do not have
a
permanent presence in the provinces served. PRTs Najaf, Karbala, Wasit,
and
Qadisiyah are co-located with PRT Babil in Hillah, and PRTs Maysan and
Muthanna
are co-located with Dhi Qar team at Camp Adder. Iraq will confront many
challenges in the next year: implementing a National Reconciliation
Plan;
passing implementing legislation for the constitution; passing
de-Ba'athification legislation; and completing the constitutional
review
process, a possible constitutional referendum, provincial elections,
and a
constitutionally specified referendum on the status of Tamim province
(Kirkuk).
How Iraq deals with these challenges will have a profound influence on
the
future of the country.

Economic Track

Progress on the economic track was hampered by a decline in oil
production and
exports during the fourth quarter of 2006. Compared to the third
quarter, crude
oil production decreased by 4 percent, and exports decreased by 5
percent.
While oil export prices remained above budget forecasts, the pull-back
in oil
prices during the fourth quarter caused real growth in the oil sector
to
decline relative to the third quarter. The International Monetary Fund
(IMF)
expected non-oil GDP growth in 2006 to grow at about 10 percent, but
statistics
are not yet available for the non-oil sector's performance during the
reporting
period.

On the monetary front, Iraq's Central Bank took several steps to combat
inflation, which reached an annual rate of 48.2 percent by the end of
November
2006. The Central Bank increased interest rates in November and
December 2006
to 16 percent and began to aggressively appreciate the Iraqi Dinar, as
the IMF
recommended. By December 2006, the Dinar had risen against the dollar
by 9.86
percent, with plans for continued appreciation to 14.28 percent in
2007.

Although the overall economy has improved, the GOI does have immediate
challenges it must address. First and foremost, it must continue the
reforms
agreed to in its December 2005 Stand-By Arrangement (SBA) with the IMF.
These
include reducing inflation, eliminating fuel subsidies, and improving
its
budget oversight and execution. Along with the response to the SBA,
Prime
Minister Nuri al-Maliki has announced a series of measures to address
Iraq's
most pressing economic issues, such as developing a modern market
economy,
improving the efficiency of the oil-sector, building capacity to manage
the
economy, fighting corruption, and improving the investment and business
environments.

The Fuel Import Liberalization Law (FILL), which was passed by the
Council of
Representatives (CoR) September 6, 2006, and signed by the Presidency
Council,
allows private imports of refined fuel products. In passing this law,
the Iraqi
Parliament set the stage for the private importation of gasoline and
diesel,
but implementing regulations have yet to be issued. The CoR also has
passed a
national investment law, which aims to promote private sector
(including
foreign) investment in Iraq; the law was approved by the Presidency
Council on
November 30, 2006. Prime Minister al-Maliki's government has also
announced its
intention to pass a hydrocarbons law in early 2007 that would attract
foreign
investment in the petroleum sector and ensure that oil revenues promote
national reconciliation and benefit all Iraqis.

Beyond the domestic measures taken, Iraq has turned to the
international
community for economic support. While the United States remains by far
the
largest single donor, other donors pledged over $13.5 billion in
assistance for
Iraqi reconstruction at the Madrid Conference in 2003. This included $8
billion
in assistance from foreign governments and $5.5 billion in lending from
the
World Bank and International Monetary Fund (IMF) - all to be disbursed
under
their own special programs between 2004 and 2007. In January 2006, $3.2
billion
of the pledges of non-U.S. assistance had been disbursed. By August
2006,
disbursements of non-U.S. assistance had increased significantly, to
about $3.7
billion. Approximately $3 billion of these disbursements was from other
donor
governments, either in bilateral projects, or through the World Bank
and the
UN-administered International Reconstruction Fund Facility for Iraq
(IRFFI). By
the end of December 2006, $1.1 billion had been committed to specific
projects,
and $586 million had been disbursed.

Of the $456.8 billion pledged to the World Bank, $411 million had been
committed, and $83 million had been disbursed. The IMF approved $436
million in
balance-of-payments support in September 2004 and an additional $685
million of
such support in December 2005.

In addition to international donations to Iraq, creditors also have
provided
significant debt relief To date, sovereign and commercial creditors
reached
debt relief agreements with Iraq that will eventually reduce Iraq's
foreign
debt by more than $50 billion, or about 40 percent of its estimated
$125
billion in external debt. Iraq's offer to commercial creditors and
other
official creditors was accepted by all large creditors. The United
States
Government is urging the Iraqi Government to increase its engagement
with
non-Paris Club creditors, especially from the Gulf States, to seek debt
relief
for Iraq on terms at least comparable to the Paris Club's 80 percent
reduction.
The U.S. Government provided Iraq 100 percent debt reduction and is
encouraging
Paris Club and other creditors to go beyond Paris Club terms as well.

The United States continues to work with other donors to coordinate
efforts on
assisting Iraq. Among the most important initiatives in this area is
the
International Compact with Iraq (ICI), launched by the Iraqi government
and the
United Nations on July 27, 2006. The Compact will provide a new
framework for
mutual policy commitments between Iraq and the international community,
particularly Iraq's neighbors. In Kuwait on October 31, 2006, the
Compact
Preparatory Group met to endorse the contents of the Compact document,
under
which Iraq will commit to reforming its main economic sectors (e.g.,
oil,
electricity, and agriculture), as well as establishing and building the
laws
and institutions needed to combat corruption, assure good governance,
and
protect human rights. In return, the international community will
support Iraqi
efforts to achieve economic and financial self-sufficiency over the
next five
years. On December 4, 2006, in Baghdad, Iraq's Council of Ministers
approved
the Compact document including Iraq's commitments. An international
conference
for Compact adoption by Iraq and its international partners is expected
to be
held during the first quarter of 2007.

I. The current military mission and the diplomatic, political,
economic, and
military measures that are being or have been undertaken to
successfully
complete or support that mission.

In fulfillment of the Multinational Forces-Iraq (MNF-I) mandate under
United
Nations Security Council Resolution (UNSCR) 1546, as extended during
the
reporting period on November 28 by UNSCR 1723 for another year, MNF-I,
in
partnership with the Iraqi Government, conducts full-spectrum
counter-insurgency operations with the goal of isolating and
neutralizing the
enemy. MNF-I also helps the Iraqi Government organize, train, and equip
the ISF
in order to create and maintain a security environment that permits
Iraq's
political and economic development.


(A) Efforts to convince Iraq's main communities to make the
compromises
necessary for a broad-based and sustainable political settlement;

The United States remains actively engaged with Iraqi political,
religious, and
civil society leaders to assist in the transition to a stable unity
government
that represents all segments of the Iraqi population. In December 2006,
President Bush, Secretary Rice, and other senior U.S. officials met
separately
in Washington with the chairman of the Supreme Council for Islamic
Revolution
in Iraq (SCIRI) Abd al-Aziz al-Hakim and Iraqi Vice President Tariq
al-Hashimi,
head of the Iraqi Islamic Party (IIP) and the Tawafuq Front (Sunni
Arab). Both
leaders came at the invitation of the United States to share their
viewpoints
about the situation in Iraq and to discuss how to improve it.

The National Strategy for Victory in Iraq (NSVI) supports a national
compact
among Iraqis as a means to separate terrorists and those insurgents who
are
unalterably opposed to the political process from those insurgents who
may be
willing to stop fighting and participate in Iraq's political process.
The NSVI
also envisions working with the Iraqi Government to develop
opportunities for
all Iraqis to partake in the political process and building effective
and
stable national institutions that will facilitate Iraq's full
integration into
the international community. These efforts are part of a long-term
strategy to
expand political space for all groups to participate in the democratic
process
for building consensus on issues that divide Iraqi communities.

With the rise of militias, current efforts for political progress in
Iraq are
also focused on national reconciliation and building international
support for
Iraq. These efforts have included active and direct engagement from the
highest
levels of the United States and Iraqi Governments. Since Iraqi Prime
Minister
al-Maliki presented his 24-point National Reconciliation Plan to the
CoR
earlier this year, three of four planned reconciliation conferences
have
convened. At the first conference, 500 tribal shaykhs endorsed the
Prime
Minister's National Reconciliation Plan, which called for an end to
sectarian
violence, disbanding of militias, a delay in federalism, and a review
of
de-Ba'athification. The second, a conference for civil society leaders,
drew
approximately 800 attendees. The third conference for political
parties, held
on December 16-17, 2006, in Baghdad, included more than 250
representatives
from Iraqi political parties and organizations. Its goal was to engage
in a
dialogue about political participation, national unity, and improving
security.
Prime Minister al-Maliki reached out to Ba'athists and invited them to
rejoin
the Iraqi military, but he cautioned that those who returned should be
loyal to
Iraq above any particular party, sect, or ethnicity. Finally, in early
2007,
the Iraqi Government plans to convene conferences for religious
scholars
designed to further the reconciliation dialogue.

During a time of rising sectarian violence, the Iraqi Government has
announced
steps to try to increase national unity. On October 2, Prime Minister
al-Maliki
announced a four-point plan aimed at ending the deepening crisis
between Shia
and Sunni parties and uniting them behind the drive to stop sectarian
killings.
The plan called for the formation of civil subcommittees, a central
follow-up
committee, a committee to monitor the media, and monthly reviews of the
plan.
According to the plan, local committees made up of representatives of
every
party, religious and tribal leaders, and security officials would be
formed in
each Baghdad district to consult on security efforts. Although the
committees
would have no police powers, they would work with Iraqi authorities to
set up
checkpoints and identify dangers in the community, as well as advise
police
officers on other security issues. A central committee, also comprising
all the
parties, would coordinate with the armed forces. Little of this plan
has been
implemented to date, however.

Prime Minister al-Maliki also pledged to tackle illegal militias, which
are
widely blamed for the growing sectarian violence in the country.
Attacks by
Iraqi insurgents and sectarian militias jumped 22 percent from
mid-August to
mid-November 2006, and Iraqi civilians suffered the bulk of casualties,
according to the quarterly report released by the Defense Department.
Under
pressure from Iraqi and U.S. officials, in a rare public rebuke of
militias in
late October, the Prime Minister ordered the Iraqi Security Forces
(ISF) to
crack down on unlawful acts by armed factions. Some progress had been
made on
this objective by the end of the reporting period, but not enough for
this
initiative to be considered a success.

The Council of Representatives (CoR) attained a major political
milestone when
it approved a regions formation law on October 11, 2006. The law, which
will
allow Iraq's provinces to hold referendums to merge themselves into
larger
federal regions, has been extremely controversial, with some leaders,
primarily
Sunni and many Shia, fearing that it could lead to the break-up of
Iraq.
Supporters, primarily the Supreme Council for Islamic Revolution in
Iraq
(SCIRI) and the Kurdish parties, agreed as a compromise that the
process of
forming regions cannot begin until April 2008.

While there has been progress, political infighting has threatened to
stall the
Iraqi Government's ability to govern effectively. The CoR frequently
has
difficulty achieving a quorum (138 of its 275 members must be present
in the
council chamber). For example, Speaker of the CoR Mahmud Mashhadani
cancelled
the CoR session scheduled for November 1, when only 76 of the 275
legislators
attended the session. At various times, Sunni parties and Sadrist
members
boycotted the parliament.

To address divisions within the government, Prime Minister al-Maliki
told
parliamentarians November 12, 2006, in a closed session that he was
planning a
"comprehensive" reshuffle of ministers in his national unity
government, and he
reportedly scolded lawmakers for failing to show their loyalty to a
united
Iraq. Al-Maliki did not disclose which ministers he planned to replace,
and no
changes have been publicly announced. Legislators close to the Prime
Minister
said he intends to maintain the political distribution of the current
cabinet
seats. Iraqi parliamentarians have been speculating about a reshuffle
for
months, but no one knows whether change in the government is actually
imminent.

The Constitutional Review Committee, under the leadership of Shaykh
Humam
Hamudi, Fuad Masum, and Ayad al-Samarrai, conducted its first meeting
November
15, 2006. This committee's role is to implement the review of the
constitution
agreed to on the eve of last year's constitutional referendum and
provide
amendment recommendations to the CoR.

In December 2006, speculation emerged into public view about the
possible
formation of a so-called moderate coalition of political parties to
challenge
extremism and violence from militias and others. While speculation
continues
whether certain parties are or are not part of this coalition, the core
parties, by all accounts, include SCIRI, the Kurdistan Democratic Party
(KDP),
the Patriotic Union of Kurdistan (PUK), and the Tawafuq Front (or at
least the
Iraqi Islamic Party (IIP)), making it a genuinely cross-ethnic,
cross-sectarian
political coalition. While pledging to confront militias, the coalition
has
pledged loyalty to PM al-Maliki, provided he embraces their willingness
to
confront extremists. As of the end of the fourth quarter of 2006, the
future of
the moderate coalition was unclear, with intra-Shia politics
endangering its
unity.


(B) Engaging the international community and the region in efforts
to
stabilize Iraq and to forge a broad-based and sustainable political
settlement;

During this reporting period, the Iraqi Government continued to work
with the
international community to promote security, economic growth, and
political
progress in Iraq. A variety of Iraqi leaders have visited regional and
European
capitals to engage the international community. To improve Iraq's
economic
outlook, international partners continued preparatory work on the
International
Compact with Iraq (ICI), in addition to other initiatives during this
period.
There were also significant political developments, which included the
restoration of Iraq-Syrian relations for the first time in twenty-five
years
and the Iraq-Iran meeting in Tehran in November 2006.

On November 28, 2006, the United Nations Security Council (UNSC)
unanimously
approved UN Security Council Resolution 1723, extending the mandate of
the
Multi-National Force-Iraq (MNF-I) for an additional year. Thirty-three
countries currently provide 14,138 troops, with the United Kingdom,
Poland the
Republic of Korea, and Australia leading the effort.

The Saudi Arabian Council of Ministers (i.e., the Saudi Cabinet) also
announced
that Saudi Arabia would actively support Iraqi forces to maintain Iraqi
unity.
Iraqi Muslim religious leaders representing both Shiite and Sunni sects
were in
Saudi Arabia for a two-day meeting sponsored by the Organization of the
Islamic
Conference (OIC). The meeting concluded on October 20, 2006, with the
signing
of the Mecca Declaration, which called for an immediate halt to
sectarian
killings in Iraq. Statements by a political commentator in the
Washington Post
in November suggesting that Saudi Arabia might intervene on behalf of
Sunnis in
Iraq were quickly disowned by the Government of the Kingdom of Saudi
Arabia.

In addition, the European Union Council of Foreign Ministers extended
the
mandate of the EU Integrated Rule of Law Mission for Iraq (EUJUST LEX)
until
December 31, 2007. EUJUST LEX is designed to provide senior members of
the
judiciary, police, and corrections officials with management and
criminal
investigation training in EU states as well as in Baghdad.

Multilateral and bilateral engagement on strengthening the Iraqi
economy also
increased during this reporting period. Kuwait hosted a preparatory
group
meeting for the International Compact with Iraq (ICI) on October 31,
2006. This
group included delegates from the UN, the United States, the United
Kingdom,
the United Arab Emirates, Kuwait, the World Bank, the International
Monetary
Fund, the European Union, the Islamic Development Bank, France,
Germany, Italy,
Japan, Saudi Arabia, South Korea, and Spain. In addition to ongoing ICI
work,
Saudi Arabian and Iraqi delegations met on October 8 to discuss
bilateral debt
relief.

On November 20, 2006, the European Commission launched talks with the
Iraqi
Government in Brussels on a bilateral trade and cooperation agreement
to boost
the European Union's relations with Iraq and integrate Iraq into the
world
economy. Iraq was also admitted into the UN Economic and Social Council
(ECOSOC), receiving 181 of 191 possible votes during the UN General
Assembly
elections on November 2, 2006. To date, the European Commission has
contributed
more than $460 million to the International Reconstruction Fund
Facility for
Iraq (IRFFI), making it the largest contributor to the United Nations
Development Group (UNDG) International Trust Fund (ITF).

Bilateral engagement in the petroleum sector also increased. As a part
of its
$3.5 billion soft-loan package, Japan agreed October 23 to offer
financing for
three projects in southern Iraq aimed at helping the country bolster
exports.
The loans will finance the redevelopment and upgrade of a refinery in
Basrah,
improvements to oil export infrastructure, and a project to increase
production
of liquefied petroleum gas.

International engagement in Iraq's political future was particularly
active in
November following the end of Ramadan. Iraq and Syria restored
diplomatic
relations that were severed 25 years ago due to Syria's support of Iran
during
the Iraq-Iran war. On November 27, Iraqi President Jalal Talabani met
with
Iranian counterpart Mahmoud Ahmadinejad in Tehran to discuss Iran's
possible
role in aiding Iraq.

A number of states also took steps toward establishing official Iraqi
representation within their territories. The Iraqi Ministry of Foreign
Affairs
received official letters from South Korea, Ukraine, Denmark, Slovakia,
Serbia,
the Philippines, Sri Lanka, and Nigeria agreeing to the opening of new
Iraqi
embassies in their countries. The Council of Ministers endorsed the
proposal of
the Foreign Ministry to open 15 new Iraqi diplomatic missions abroad.
The
countries in which Iraq will open these missions include Hungary,
Norway,
Denmark, Ukraine, Switzerland, Serbia, Slovakia, South Korea,
Philippines, Sri
Lanka, Senegal, Kenya, Nigeria, Mauritania, and Argentina.


(C) Strengthening the capacity of Iraq's government ministries;

The United States is pursuing several initiatives to improve the
capacity of
Iraqi ministries, both in Baghdad and at the local level. A number of
projects
using the Iraq Relief and Reconstruction Fund (IRRF) will have an
ongoing
impact on building capacity, such as assisting the Ministry of Finance
to
prepare and implement banking and financial reforms; assisting the
Ministry of
Labor and Social Affairs to develop a social safety net and a viable
pension
system; providing assistance to the Ministry of Agriculture in the
development
of a national water strategy; improving the institutional capacity of
the
Ministry of Health to deliver care and fight disease; and developing an
Education Management Information System for the Ministry of Education
to
improve management of human and physical resources. The United States
Government also has dedicated significant resources to rehabilitating
and
building new infrastructure, while working alongside the staff at the
Ministries of Electricity, Municipalities and Public Works, Water
Resources,
and Oil, to improve the ability of their national, regional, and local
staff to
operate and maintain United States Government-funded facilities,
systems, and
equipment on a sustainable basis.

The Embassy is also implementing a broader program to improve the
capacity of
key ministries to carry out core functions, such as strategic planning,
budgeting, training, and managing a personnel system. The National
Capacity
Development Program (NCDP) and other targeted bilateral assistance
programs are
helping the Iraqi Government strengthen the core functions necessary
for the
efficient administration of its key national ministries, the Prime
Minister's
Office, inspectors general of the participating ministries, and
anti-corruption
organizations such as the Commission on Public Integrity (CPI) and the
Board of
Supreme Audit (BSA). The program is organized into two phases to enable
rapid
response to short-term priorities while concurrently building the
foundation
for long-term needs. Ministry Advisory Teams, composed of experts from
the
Mission, Iraqis, and other international donors, provide policy and
programmatic advice and work jointly with the ministries to develop and
address
ministry priorities. The longer-term NCDP track focuses on increasing
the
capacity of national public administration centers to train ministry
employees,
as well as on a long-term, cross-ministry training program in core
functions
(financial management, human resources, strategic planning, leadership,
and
communications). The first training sessions on budget and procurement
have
already taken place and were well-received by the Iraqi participants
from the
Ministries of Oil, Water Resources, Electricity, Planning and
Development
Cooperation, as well as from the national training center.

Capacity building efforts for the Ministries of Defense and Interior
are led by
the DoD and are addressed in Section IV (D) on pages 22-23.


(D) Accelerating the delivery of basic services;

The United States continues to assist Iraq with improving its ability
to
maintain critical infrastructure, particularly in water and
electricity. The
Embassy is implementing a $180 million program to continue sustainment
efforts
in the electricity and water sectors and provide support to additional
sectors
to help Iraq maintain its infrastructure. Of the $180 million, $110
million is
in the water sector, $61 million is in the electricity sector, and $9
million
is in the additional areas of communications, transportation, and
health. These
programs are having a significant impact on the long-term viability of
existing
infrastructure. Keeping Iraqi plants online makes it possible to
improve the
levels of service offered to the average Iraqi. The Embassy is
augmenting this
program with $355 million from the FY 2006 Supplemental to continue
both
sustainment and capacity development efforts at plant-level facilities.

Reconstruction continues to face insurgent attacks that drive up the
cost of
doing business, both in terms of financial costs and human resources.
Protection of oil pipelines and electrical power transmission lines has
proven
especially difficult. Targeted attacks on Iraq's infrastructure, as
well as
dramatic increases in the demand for electricity and fuel driven by
subsidized
prices, also have contributed to the challenges of increasing hours of
available electricity. Work in the oil and electricity sectors,
moreover, has
been affected by decades of mismanagement, corruption, decay,
dilapidated and
insufficient infrastructure, and poor maintenance. Despite this and
other
challenges, the United States Government, in cooperation with the Iraqi
government, has rehabilitated water and sewage services and immunized
children
against infectious diseases.

U.S. assistance programs helped to build or refurbish the basic
infrastructure
that will enable Iraqis to significantly expand the delivery of basic
services.
In addition to ongoing projects, this expansion will be further
enhanced by
improvements in Iraqi capacity, subsidy, and pricing reforms. Over the
last
quarter, the Iraqi Government has completed projects to increase
redundancy in
the electrical system.

Oil production and exports steadily improved in 2006 relative to 2005,
resulting in the highest annual export average since 2001. As a result
of
increased exports and higher crude oil prices, 2006 oil revenues are
about $2
billion ahead of IMF revenue targets. While the annual average has
increased,
both production and exports declined in the fourth quarter due to a
variety of
factors, including equipment and maintenance problems, intermittent
power
failures, inadequate funding for repairs, and the early arrival of
wintry
storms in the Gulf. Compared to the third quarter, crude oil production
for the
fourth quarter decreased by 4 percent to 2.17 million barrels per day
(mbpd),
and exports decreased by 5 percent to 1.48 mbpd. The 2006 annual
production
average is 2.13 mbpd, and the annual export average is 1.50 mbpd.


(E) Securing the delivery of pledged economic assistance from the
international community and additional pledges of assistance;

The United States is working closely with Iraq and international donors
to
increase international support for Iraq. The primary focus of the
International
Compact with Iraq (ICI) is to build a framework for Iraq's economic
transformation and integration into the world economy. The Compact
announcement
received strong endorsements from the United States, the European Union
and
Commission, Britain, Italy, Japan, and Spain. In four months, Iraq and
the UN
made significant progress, and produced a draft of the Compact that was
approved by the Preparatory Group on October 31, 2006, in Kuwait. The
Iraqi
Council of Ministers unanimously approved this draft at the end of
November. A
final signing ceremony is expected to take place early in 2007.

The Compact is a statement of Iraq's intent to become a united,
federal,
democratic country at peace with itself and its neighbors, on its way
to
sustainable economic self-sufficiency and prosperity, and integrated
into the
world economy. On September 18, 2006, at high-level meetings held
alongside the
United Nations General Assembly meeting in New York and the IMF/World
Bank
meeting in Singapore, the ministers of foreign affairs and finance from
more
than 35 countries and institutions expressed their strong support for
the
Compact. In written and oral statements, a broad segment of the
international
community expressed support for the Compact. Particularly noteworthy
were the
positive comments of Iraq's regional neighbors (the UAE, Kuwait, Saudi
Arabia,
and Turkey) and regional institutions (the Islamic Development Bank and
the
Arab Fund for Economic and Social Development).

The Compact can enhance the efficacy and increase the real benefits of
current
and future donor assistance. As part of the process of formulating its
side of
the Compact, the Iraqi Government is coming to terms with some of its
own
weaknesses. Under the Compact, with its specific goals and benchmarks,
the
Iraqi Government should be taking ownership and responsibility for
making the
necessary improvements. Moreover, the Compact should broaden the base
of
support and interest in Iraq's reconstruction to include a much larger
group of
countries, especially Iraq's neighbors. The Compact will not replace
the
International Reconstruction Fund Facility for Iraq (IRFFI), but rather
will
help IRFFI to deliver donor assistance in a more targeted and effective
manner.
Finally, the Compact aims explicitly to bring increasing amounts of
private
capital into Iraq, since international businesses and investors will
ultimately
have a greater impact on Iraq's future than government assistance.
Iraq's
commitments to basic economic reforms and good governance will be
particularly
important to Iraq's economic success over the long term.

At the October 2003 Madrid International Donors' Conference, partners
other
than the United States pledged over $13.5 billion in assistance. This
included
$8 billion in assistance from foreign governments and up to $5.5
billion in
lending from the World Bank and International Monetary Fund (IMF) to be
disbursed over four years (2004-2007). Since Madrid, donors have
pledged an
additional $514 million to support Iraq's reconstruction and
development. As of
December 2006, about $3.7 billion of the pledges of non-U.S. assistance
has
been disbursed. Approximately $3 billion came from other governments
either in
bilateral projects or through the World Bank and the UN-administered
IRFFI, and
the remainder was received from multilateral institutions. (Donor
government
"disbursements" are defined here as the funds from donor government
treasuries.) There are currently 118 IRFFI projects (103 UN, 15 World
Bank) in
various stages of completion in the water, electricity, education,
health, and
other sectors. At the end of August 2006, of the total $1.16 billion in
the UN
Trust Fund, $861 million has been committed to specific projects, and
$534
million disbursed. Of the $456.8 million pledged to the World Bank
Trust Fund,
$395 million has been committed to specific projects, $140 million in
contracts
has been awarded, and $67.5 million disbursed.

The IMF approved $436 million in balance-of-payments support through
its
Emergency Post-Conflict Assistance (EPCA) program in September 2004. It
approved a $685 million in balance-of-payments support as part of its
Stand-By
Arrangement (SBA) for Iraq in December 2005, although Iraq has not
asked for
any disbursements thus far under the SBA. The Iraqi government sets the
priorities for reconstruction and assistance programs and coordinates
their
annual budgets with the IMF in order to meet agreed upon targets in the
SBA.
The United States and other donors work closely with the Iraqi
Government and
with each other to ensure that the projects and programs are not
duplicative,
and that they are integrated with the Iraqi Government's development
planning.
In July 2005, the Iraqi government set up a Baghdad Coordination Group
(BCG)
consisting of United States embassy and other donor representatives to
improve
further donor coordination. The BCG meets frequently and has developed
synergies between donor programs in several areas.

Reduction of Iraq's external debt burden to sustainable levels, another
top
priority for Iraq's economic development, is a key component of U.S.
donor
coordination. Although little specific progress was made in the
reporting
quarter, overall, Iraq has achieved significant progress on debt
relief, with
more efforts underway at the end of the reporting quarter and still
more
efforts coming in the run-up to the conclusion of the ICI. To date,
sovereign
and commercial creditors reached debt relief agreements with Iraq that
will
eventually reduce Iraq's foreign debt by more than $50 billion, or
about 40
percent of its estimated $125 billion in external debt. In November
2004, the
Paris Club group of creditors agreed to forgive, in phases, 80 percent
of the
approximately $40 billion in Iraqi debt held by its members. As of
December
2006, 17 out of 18 Paris Club members, offering at least 80 percent
debt
reduction of $37 billion of debt, have now signed bilateral debt
agreements
with Iraq. Russia, whose debt claim is $3.5 billion, reiterated on
September 18
its intention to write-off 80 percent of Iraq's Saddam-era debts. The
United
States itself went beyond Paris Club terms and has forgiven 100 percent
of the
$4.1 billion in U.S.-held Iraqi debt.

Progress with official non-Paris Club creditors remains slow; however,
Iraq has
begun to reach out to the Gulf countries, an essential step. The
largest
non-Paris Club creditors are the Gulf countries, which represent an
estimated
$45 billion in claims. The United States continues to encourage all
non-Paris
Club creditors to provide debt reduction to Iraq on terms at least
comparable
to those offered by the Paris Club. With regard to commercial debt,
three cash
offers to small creditors and the debt exchange offers to large
creditors
resulted in over 10,000 claims worth more than $19.7 billion having
been
treated, with 96 percent (by value) of creditors receiving offers
having
accepted.

The United States, in coordination with the Iraqi Government, actively
encourages its international partners and allies to make new pledges of
assistance, and bilateral or multilateral aid, as well as to disburse
existing
pledges committed to in Madrid in 2003. The United States is in regular
high-level and working-level contact with current and prospective
international
donors. In May 2006, the World Bank announced plans to open an office
in Iraq
headed by a Country Director, whom the World Bank is expected to name
soon.


(F) Training Iraqi Security Forces and transferring additional
security
responsibilities to those forces and the Iraqi government;

The Ministry of Defense (MOD) and the Ministry of Interior (MOI)
security
forces continue to increase in size and capability and are increasingly
taking
over lead combat responsibility from Coalition forces. MNF-I continues
to
support and assist the ISF as they move toward conducting fully
independent
operations and achieving security self-reliance.

More than 45,000 additional Iraqi soldiers and police have completed
initial
training and equipping since August 2006, bringing the total number of
ISF who
have been trained and equipped to about 323,000, consisting primarily
of
188,000 Ministry of Interior and 135,000 Ministry of Defense forces.
The Prime
Minister's ISF initiative will add approximately 30,000 troops, which
increases
final force authorizations to more than 353,000 security forces.

As mentioned previously, the ISF demonstrated an increased capability
to plan
and execute counter-insurgency operations. As of December 11, 2006, 8
Division
Headquarters, 31 Brigade Headquarters, and 92 Iraqi Army battalions had
been
assigned their own areas for leading counter-insurgency operations. The
Iraqi
Ground Forces Command (IGFC), a corps-level organization, now has
operational
control of the 8th, 4th, and 3rd Iraqi Army Divisions, Iraqi Navy, and
Iraqi
Air Force. The IGFC will assume control of several more Iraqi Army
Divisions in
early 2007.

The Iraq Minister of Interior, with the assistance of the Coalition,
has begun
a four-phased National Police transformation plan that, over time, is
aimed at
creating a highly professional police force loyal to the Government of
Iraq.
All National police brigades will undergo a four-week program, one
brigade at a
time. This focused training phase of the transformation plan should be
complete
in the summer of 2007. The final phase will be dispersal of National
Police
units to each Iraqi province, providing a civil security force that can
respond
as a paramilitary force, avoiding the need for a military response.

Despite training efforts, though, there is evidence that Jaysh al-Mandi
(JAM),
a militia force created by Muqtada al-Sadr, and other militias have
infiltrated
elements of the police force. There have been repeated reports of
sectarian
violence and kidnappings committed by militia members wearing
police-issued
uniforms and using police vehicles. Meanwhile, some police units have
been
pulled from circulation for retraining due to poor performance. As a
result,
public trust in the police is low.

The Secretary of Defense's quarterly report to Congress, Measuring
Security and
Stability in Iraq, provides more extensive measurements and indicators
of the
training and performance of the ISF and of Iraq's current security
environment.

II. Whether the Iraqis have made the compromises necessary to achieve
the
broad-based and sustainable political settlement that is essential for
defeating the insurgency in Iraq

Despite rising sectarian violence, there have been signs that some
Iraqis are
attempting to make compromises towards a sustainable political
settlement and
defeating insurgents. Iraqi political parties agreed on October 7,
2006, on the
make-up of the Central Committee for Peace and Security, which will
include
four representatives each from the Shia Coalition that dominates
parliament and
the main Sunni Coalition, along with one representative each from the
Kurds and
the Iraqiyya List. Iraqi government officials announced October 10,
2006, that
Iraqi political parties agreed that every security checkpoint in
Baghdad will
have an equal number of Shia and Sunni troops in an effort to ensure
the
security forces do not allow sectarian attacks. The arrangement was the
first
made under Prime Minister al-Maliki's newly-introduced four-point
security
plan. The extent to which this plan is actually being implemented,
however, is
not clear.

Iraq's courts charged 57 employees, including high-ranking officers,
with human
rights crimes for their roles in the torture of hundreds of detainees
once
jailed in a notorious eastern Baghdad prison known as Site 4. Although
the
accused have not yet been arrested, the charges marked the first time
the Iraqi
Government has initiated criminal action against members of its own
security
forces for operating torture chambers inside Interior Ministry prisons.
We
continue to press for arrests and prosecution of those responsible.

Most Iraqi officials agree that the insurgency cannot be defeated by
military
means alone and that a political solution is essential. Despite strong,
positive statements by PM al-Maliki and numerous other officials
calling for
reconciliation, the CoR has not implemented legislation to enact a
reconciliation plan into law. Nor have reforms been made to the powers
of the
Higher National De-Ba'athification Commission, for example, which is at
or near
the top of the list of steps many Sunni Arabs say must be taken to
persuade
other Sunnis to abandon the insurgency. Questions remain about the
commitment
of some members of the government to genuine reconciliation. Some
Iraqis would
prefer to see the present conflict continue until the other side
concedes
defeat, a notion that most Iraqi Government officials, as well as the
United
States Government and most outside observers, would say is entirely
mistaken.

III. Any specific conditions included in the April 2005 Multi-National
Force-Iraq campaign action plan (referred to in United States
Government
Accountability Office October 2005 report on Rebuilding Iraq; DOD
Reports
Should Link Economic, Governance, and Security Indicators to Conditions
for
Stabilizing Iraq), and any subsequent updates to that campaign plan,
that must
be met in order to provide for the transition of additional security
responsibility to Iraqi Security Forces

Following the publication of the October 2005 GAO report, the President
published the National Strategy for Victory in Iraq (NSVI), which lays
out the
goals and general framework to achieve security and stability in Iraq.
Although
the NSVI is not a detailed plan for achieving specific objectives,
consistent
with the public nature of that document, it delineates measurable
trends along
each of these tracks to indicate where programs are achieving success
and where
it is necessary to increase efforts or adjust implementation of the
strategy.
Consistent with the NSVI, MNF-I and Embassy Baghdad updated the Joint
Campaign
Plan in April 2006. A policy review is currently underway and will be
announced
soon, but not in time for the present report.

The Iraqi Government, jointly with military and political leadership of
the
United States and Coalition partners in Iraq, will assess when
conditions
permit handing over security responsibility for specific areas from
Coalition
forces to the Iraqi civil authorities. The Joint Committee to Transfer
Security
Responsibility (JCTSR) has developed criteria to guide the transfer of
security
responsibility.

Recommendations for transfer include an assessment of conditions in
four
categories:


1. Threat Assessment
2. ISF Readiness
3. Local Governance Capability
4. MNF-I Ability to Respond Quickly to Major Threats, if needed

In mid-December 2006, responsibility for the security of Najaf Province
was
transferred from MNF-I to the Iraqi Provincial Governor and the
civilian-controlled Iraqi police. Najaf is the third of Iraq's 18
provinces to
make this transition. Pending successful negotiations between the
Government of
Iraq and the Kurdistan Regional Government, security responsibility for
Dahuk,
Irbil and Sulamaniyah Provinces will be transferred to the Kurdistan
Regional
Government as soon as conditions warrant.

The President of the United States and the Prime Minister of Iraq
agreed during
the reporting period to form a high-level working group dedicated to
achieving
three common goals: accelerating the pace of training of the ISF, Iraqi
assumption of operational control of its military forces, and transfer
of
security responsibilities to the Government of Iraq. To this end, three
committees were formed to address training and resources, security
transfer,
and security coordination.

IV. To the extent that these conditions are not covered under paragraph
III,
the following should also be addressed


(A) The number of battalions of the Iraqi Armed Forces that must be
able to
operate independently or to take the lead in counter-insurgency
operations
and the defense of Iraq's territory;

As of December 11, 2006, 119 Iraqi Army, Special Operations, and
Strategic
Infrastructure Battalions are now conducting counter-insurgency
operations,
with 92 battalions assessed as capable operating "in the lead" or
independently. Iraqi Security Forces have been independently conducting
up to
one-third of all reported company-sized operations. As Iraqis take the
lead for
security, Coalition forces will increasingly shift to supporting roles.

Recently Prime Minister al-Maliki received support for his ISF
expansion
initiative, which will add approximately 37,000 security forces
including an
additional Iraqi Army division headquarters. Details of the final
authorized
end-strength plus up of the Ministry of Defense Iraqi Armed Forces and
Ministry
of Interior security forces have not been revealed by the Iraqi
government.


(B) The number of Iraqi special police units that must be able to
operate
independently or to take the lead in maintaining law and order and
fighting
the insurgency;

The Iraqi Government's civil security forces consist of the Iraqi
Police
Service (IPS), National Police (formerly the Special Police, comprising
the
Police Commandos, Public Order Police, and the Mechanized Police),
Department
of Border Enforcement, and the Center for Dignitary Protection.

As of December 11, 2006, 188,300 civil security personnel (135,000 IPS
personnel and 53,300 other Ministry of Interior forces, including 27
National
Police Force battalions) have been trained and equipped. Two of these
units are
assessed capable of operating in the lead or independently. There is no
specific threshold for the number of Iraqi National Police units that
must be
judged capable of operating independently or in the lead before U.S.
force
levels can be reduced. As noted above, militia infiltration of the IPS,
and
reports of sectarian violence committed by militia members wearing
police
uniforms and using police equipment, have undermined public confidence
in IPS
as a force for maintaining law and order.


(C) The number of regular police that must be trained and equipped
to
maintain law and order

As of December 11, 2006, over 135,000 IPS have been trained and
equipped. These
IPS personnel work alongside the 53,300 other Ministry of Interior
forces
described in the previous section. The IPS is responsible for security
measures
in over 130 districts and nearly 1,000 stations throughout Iraq.

Police Transition Teams (PTTs), National Police Transition Teams
(NPTTs),
Border Transition Teams (BTTs), and Customs and Border Protection Teams
(CBPTs)
mentor civil security forces. Police transition teams are embedded in
an
advisory capacity within the Iraqi Police Service in the outlying
provinces to
mentor and conduct joint patrols with MOI security forces on a daily
basis.
There are over 170 Police Transition Teams. Each team has approximately
11-15
members, of which 3-4 members are International Police Liaison Officers
hired
as State Department contractors. The remainder are military personnel,
many of
whom are Military Police.

Law and order is more than a function of the number of trained and
equipped
police. Achieving law and order in Iraq will require addressing militia
infiltration of the IPS and winning the trust of the Iraqi public,
regardless
of sect.


(D) The ability of Iraq's federal ministries and provincial and
local
governments to independently sustain, direct, and coordinate Iraq's
security forces;

Embedded transition teams continue to provide mentoring support to all
senior
Ministry of Defense (MOD) and Ministry of Interior (MOI) officials;
however,
competence levels in both ministries remain low. The current MOD team
consists
of fewer than 50 advisors including civilian advisors from other
Coalition
countries. The Coalition Police Assistance Transition Teams (CPATT)
work
closely with the MOI on developing and assessing ministerial capacity.
The MOI
Transition Team is composed of over 100 advisors. These advisory
efforts are
vital to support the ministries as they strive to meet new and
ambitious
challenges.

Corruption, illegal activity, and sectarian influence have also
constrained
progress in developing MOI forces. Minister of Interior Jawad al-Bulani
says he
is intent on removing corrupt leaders and instituting policies to
eliminate
corruption. Some officers have been removed, but the MOI continues to
be
regarded by most Iraqis as notoriously corrupt.

The Ministry of Interior's Internal Affairs Directorate conducted 228
human
rights-related investigations through September 2006. Of these, 76
resulted in
disciplinary punishment, 10 were closed due to insufficient evidence,
and 142
awaited Judicial Review. Internal Affairs also initiated a specialized
training
curriculum tailored to the needs of Internal Affairs investigators. By
the end
of September 2006, 650 Internal Affairs officers had received
specialized
training out of an estimated 1,000 full-time employees.

Along with the Minister of Interior's minor improvements, there has
been some
success in stabilizing the Ministry of Defense, which suffered through
assassinations, widespread intimidation and death threats against
employees,
and a major corruption scandal in the year following its establishment
in March
2004. Minister of Defense Abd al-Qadr Muhammad Jassim al-Mufraji sees
his post
as long term and has begun to re-shape the MOD. He recognizes the
importance of
forging a close partnership with the Coalition and emphasizes joint
initiatives
such as force replenishment and improvement of force deployability.
Procurement
to meet force modernization goals is accelerating and is supported by
an
increasingly robust internal system to determine priorities.

Within the MOD, Inspectors General offices conduct some spot
inspections of MOD
detention facilities - more are needed. The IG has also published
standard
operating procedures for detention operations, although enforcement is
not
comprehensive. MOD's Human Rights Division established a public hotline
for
human rights abuse reporting. It also reviews Coalition reports of
violations,
conducts investigations of substantiated abuse, and forwards findings
to the
Minister for action. Specialized human rights training is provided to
all
commanders up to the division level. This training also is being
incorporated
into service academy courses. As with the MOI, MOD must make
substantial
improvements in human rights.

Competence levels in certain parts of the MOD remain low. The
Coalition's MOD
Transition Team is providing mentoring support to all senior MOD
officials to
develop their capacity to manage key ministerial functions. These
institutions
will require strong support and partnership for a number of years.

V. The criteria to be used to evaluate progress toward meeting such
conditions
necessary to provide for the transition of additional security
responsibilities
to the Iraqi Security Forces

Security transition can only occur after four criteria are met:


* Implementation of Partnerships: MNFL-I and its Major Subordinate
Commands
must establish and maintain partnerships across the entire spectrum
of
Iraqi Security Forces units, from battalion through to ministerial
level;
* Achievement of Iraqi Army Lead (IAL): Process during which Iraqi
Army units
progress through stages of capability from unit formation to the
ability to
conduct counter-insurgency operations;
* Attainment of Provincial Iraqi Control (PIC): Iraqi civil
authorities
satisfy the conditions required to assume control and exercise
responsibility for the security of their respective provinces. This
is
achieved by attaining the previously mentioned four criteria: the
ability
of Coalition forces to reinforce the ISF if necessary; readiness
and
capabilities of ISF; levels of present and projected insurgent
activity;
and the readiness and capabilities of relevant government
institutions;
* Iraqi Security Self-Reliance: The Iraqi government achieves PIC (or
a
combination of PIC and IAL) throughout Iraq; and the government,
through
its security ministries, is capable of planning, conducting, and
sustaining
security operations and forces. The four criteria-implementation of
partnership, IAL, PIC, and Iraqi Security Self-Reliance-are
proceeding at a
different pace in each province. That is, some provinces will have
achieved
full Iraqi Security Self-Reliance while others are working to
achieve an
Iraqi Army Lead.

VI. A plan for meeting such conditions, an assessment of the extent to
which
such conditions have been met, information regarding variables that
could alter
that plan, and the reasons for any subsequent changes to that plan

In consultation with the military commanders in Iraq, the Iraqi
government, and
Coalition partners, the U.S. Department of Defense, under Secretary
Robert
Gates' leadership, will continue to advise the President on the
appropriate
level of U.S. forces in Iraq and the surrounding theater of operations
based on
current conditions. These conditions include, but are not limited to,
key
elements of the MNF-I Campaign Plan, such as the increasing
responsibility of
the ISF in counterinsurgency operations and ownership of areas of
responsibility and progress in the political process.

During the past three months, attack levels were at the highest on
record, due
in part to what has become an annual cycle of increased violence during
the
month of Ramadan. Baghdad was the focus of much of Iraq's violence, but
it was
also significant in Diyala and Anbar Provinces and in the cities of
Kirkuk,
Mosul, Basrah, Al Amarah, and Balad. The most noteworthy development in
the
Iraqi security environment was the growing role of Shia militants who
were
likely responsible for more civilian casualties than those associated
with
terrorist organizations.

Due to a recently demonstrated inability of the Iraqi Army to deploy
units to
Baghdad in support of operations, the Minister of Defense formed a
committee to
determine how to improve the deployability of the Iraqi Army. The
committee
recommended identifying a battalion from all but four of Iraqi army
divisions
to serve as a rapid deployment force for that division. The battalion
and its
commander will be handpicked by the MOD committee and the unit will
receive
priority on equipment and training. It will be filled to 100 percent
authorized
strength and the soldiers will receive "deployment" incentive pay as a
reward
for volunteering.

To increase the predictability of deployments for soldiers, the
committee also
recommended a four-phase, 180-day deployment cycle that all units will
complete
prior to movement from their home base. This Iraqi solution to the
deployability problem exemplifies Iraq's increasing willingness to
shoulder the
responsibility of a sovereign nation.

In an effort to help Iraq shoulder their responsibility, the President
announced in his new strategy that he will send more than 20,000
additional
troops to Iraq to help Iraq carry out its campaign against sectarian
violence
and secure Baghdad. The majority of those troops will be deployed to
Baghdad,
will work alongside Iraqi units, and will be embedded in their
formations. The
troops will help Iraqis secure their neighborhoods, protect the
population, and
ensure the Iraqi forces left behind are capable of providing the
security Iraq
needs.