In 2006, the US is expected to cut troops and spending, leaving it with less sway in Iraq.
BAGHDAD AND CAIRO
As the weight of the Shiite Islamist victory in Iraq's election is still being calculated, US influence in the country - in reconstruction, security, and politics - is steadily receding.
While a diminished US role in Iraqi affairs was inevitable, the speed of the retreat raises some risks to the establishing of a stable, US-friendly Iraq. The Shiite parties that dominated the vote in December have closer affinity to Iran than to the US. At the same time, the Bush administration is planning sharp cuts in reconstruction aid, a major point of leverage in Iraqi affairs.
"I think it's pretty clear our influence is waning as far as agenda setting," says Noah Feldman, a law professor at New York University and a former top US adviser on the writing of Iraq's Constitution.
What then are America's best hopes for steering Iraq in a direction favorable to US interests? Some analysts say the US may reach out to its erstwhile enemies - the Sunnis.
"I wouldn't be the least surprised if the Americans cut a deal with Sunni [political figures with ties to the insurgency] to cut the Shiites down to size," says Dan Plesch, a research associate at the School of Oriental and African Studies at the University of London.
However, that tack could carry high risks in the form of greater short-term violence.
"Certainly the violence in Iraq has been much lower than it might have been, because there's been a fair deal of restraint among Shiite leaders," says David Mack, vice president of the Middle East Institute in Washington. "And that might end now - they may feel the need to really go after the Sunni Arabs as a diversion."
Theoretically, the US could reoccupy Iraq, but at a disastrous cost to America's international standing and popular opposition at home. Since democracy and restoration of sovereignty has been the US position, this seems unlikely.
When Iraq's government is formed, which may take up to two months, it will be inheriting a country with massive problems and less money to address them than its predecessor.