From a purely military perspective, there can be little doubt that the U.S. surge in Iraq led by General David Petraeus is improving the near-term security situation on the ground. While 2007 was the deadliest year yet for U.S. forces, American casualties are at their lowest levels since March 2006. Iraqi civilian casualties are reportedly down 60% since June, while attacks against U.S. forces and Iraqis have dropped 55% since the start of the American troop build-up nine months ago. Some Iraqi towns and neighborhoods are beginning to see renewed economic activity, if not normalcy. And over the last several weeks, some of Iraq's two million refugees are starting to return home. (While their numbers remain in dispute, the U.S. military is worried about the explosive potential of refugees returning to their ethnically-cleansed neighborhoods.) It's no wonder Rep. John Murtha (D-PA), an early advocate of American withdrawal from Iraq, declared after a visit to Baghdad this week, "I think the 'surge' is working."

Murtha also noted that the Iraqis "have got to take care of themselves." After all, the surge strategy was designed, as both President Bush and General Petraeus have described it, to provide "breathing room" for political accommodation and national reconciliation in Iraq. There, the situation is infinitely more complicated.

The greatest impact on U.S. fortunes on the ground in Iraq has resulted from the burgeoning American alliances with Sunni tribal leaders in the increasingly common fight against Al Qaeda. For months, U.S. commanders have been striking deals with Sunni sheiks to eject Al Qaeda and its foreign fighters from their strongholds and safe havens in Anbar province. (As the Washington Post reported in October, some in the U.S. military believe "it has dealt devastating and perhaps irreversible blows to al-Qaeda in Iraq in recent months.)" The U.S. has now enrolled over 75,000 Sunnis in "concerned local citizens" groups, with members paid $300 a month to patrol neighborhoods and man checkpoints. These U.S.-backed squads will increasingly target fleeing Al Qaeda elements now fueling the growing violence in the north of Iraq.

All of which is creating mounting problems for the government of Prime Minister Nouri al Maliki. As part of its surge strategy, the United States is quickly establishing autonomous Sunni security forces loyal not to the Shiite dominated government in Baghdad, but to Sunni tribal leaders and their American allies. The very progress against Al Qaeda that is making American troops safer is creating the seeds of conflict with the Iraqi government. As McClatchy reports, al Maliki and his allies are none too happy about it:

Dr. Safa Hussein, Maliki's deputy national security adviser and the head of a committee tasked with reconciling Iraq's rival factions, said the government was increasingly concerned about what would take place once the United States no longer was supervising the "concerned citizens" groups closely.

"We have tens of thousands of people who are carrying weapons on a contract basis, and when their contracts are finished where will they go?" he asked. "The Ministry of Interior and Ministry of Defense can't absorb them all, and the problem is they are growing very rapidly and the Iraqi government doesn't have any control over that."

"When the U.S. leaves, what we'll have are two armies," said Sami al Askari, a Shiite lawmaker who speaks to Maliki daily. "One who's loyal to the government and one not loyal."

Which may explain the al Maliki government's interest in a permanent U.S. military presence in Iraq. American troops may be needed indefinitely to protect the Maliki government from sectarian violence or a Sunni coup attempt increasingly - and ironically - made possible by support from his U.S. allies. Bruce Riedel, a former CIA analyst now at The Brookings Institution described the quandary:

"There is a danger here that we are going to have armed all three sides: the Kurds in the north, the Shiite and now the Sunni militias...As the Shiites see the Sunnis getting closer to the Americans, that will only reinforce their concern that this is a hostile measure designed somehow to undermine their government."

If the "Declaration of Principles of Friendship and Cooperation" signed this week by Prime Minister Al Maliki and President Bush provides protection for the former, it serves other needs altogether for the latter. With Al Qaeda in Iraq teetering on the edge of defeat, Iraq is certainly not the "central front in the war on terror." But it remains the dream of American business, especially energy interests, to capture the concessions and preferential access to Iraqi oil resources promised by the statement of an "enduring relationship." And more than anything, U.S. bases in Iraq would constitute a potential bulwark against the expanding regional power of Shiite Iran.

Which just happens to be an ally of the Maliki government and its Shiite alliance partners. Two weeks ago, an al Maliki spokesman credited Iran for its reduced support of Muqtada al Sadr and other militias. As the Washington Post reported:

The turning point was an August visit by Prime Minister Nouri al-Maliki to Shiite-dominated Iran, where he told supreme leader Ayatollah Ali Khamenei to choose between supporting the Shiite-led Iraqi government or other parties, spokesman Ali al-Dabbagh said.

"Iran is showing more restraint in sending people and weapons to destabilize Iraq," al-Dabbagh.

That might also help explain the October 7 truce between Al Sadr and Abdul Aziz al-Hakim, leader of the Supreme Islamic Iraqi Council (SIIC). Maliki's Dawa party is part of the Hakim-led United Iraqi Alliance. Hakim is also the force behind the Badr Brigades, which like al Sadr's Mahdi Army is supplied with weapons by Iran. And despite his tough talk against Iran and its role in Iraq, President Bush has met with al Hakim three times, including White House visits in December 2006 and again just this week.

And so it goes. The very steps improving security on the ground deepen the political impasse in Iraq. Even fervent surge supporters like Senators Lindsay Graham (R-SC) and Saxby Chambliss (R-GA) are running out of patience with the lack of progress on a new oil law, constitutional changes, regional elections, Kurdish autonomy and other promised steps towards Iraqi national reconciliation. Graham this week threatened to withhold American support and aid to the Maliki government:

"I do expect them to deliver. What would happen for me if there's no progress on reconciliation after the first of the year, I would be looking at ways to invest our money into groups that can deliver."

It's no wonder the White House is scaling back expectations, changing its goal of "national reconciliation" to mere "accommodation."

As the surge grinds on, President Bush for once is actually right to claim "we're making progress." (While polls show Americans increasingly believe that claim, they still don't believe in their President.) But the reduction in violence on the ground in Iraq is bringing the United States no closer to any end-game that can be described as winning. President Bush told Americans that we are fighting for an Iraq that can "govern itself, sustain itself, and defend itself."

By that definition of victory, we can never leave Iraq.