It is strange to hear George Bush and John Reid deny that a civil war is going on, given that so many bodies – all strangled, shot or hanged solely because of their religious allegiance – are being discovered every day. Car bombs exploded in the markets in the great Shia slum of Sadr City in early March. Several days later a group of children playing football in a field noticed a powerful stench. Police opened up a pit which contained the bodies of 27 men, probably all Sunni, stripped to their underpants; they had all been tortured and then shot in the head. Two and a half years ago, when the first suicide bomb targeting the Shias killed 85 people outside the shrine of Imam Ali in Najaf, there was no Shia retaliation. They were held back by Grand Ayatollah Ali al-Sistani and the hope of gaining power through legal elections. Since the Samarra bomb this restraint has definitively ended: the Shia militias and death squads slaughter Sunnis in tit-for-tat killings every time a Shia is killed.
Iraqis often deceive themselves about the depth of the sectarian divisions in their country. They say, rightly, that there are many intermarriages between Sunni and Shia and claim the sectarian divide is less extreme than it is in Belfast, where Roman Catholic and Protestant seldom marry. But such marriages are most common among the educated middle class in Baghdad and, in any case, they have become less common since 2003, when sectarian differences widened after Sunnis rebelled against the occupation and the Shia community did not. My Shia and Kurdish friends, who see themselves as wholly non-sectarian, sincerely believe that the three-year-old Sunni rebellion is the work of a few jobless Baathist officials making common cause with Islamic fanatics imported from Saudi Arabia. 'They are not real Iraqis,' they say. They refuse to accept that the guerrillas are supported by most of the five-million-strong Sunni community, despite the evidence of opinion polls. The Sunnis and the Kurds, for their part, see the Shia leaders as puppets manipulated by Iranian intelligence. They will not take on board that the 15 or 16 million Shias, who make up 60 per cent of the population, will not give up their bid for power after centuries of marginalisation. Kurdish hostility to Arabs is equally underestimated by both Shia and Sunni. While I was in Arbil, the Kurdish capital, two Sunni friends emailed to say they planned to drive from Baghdad to see me. They didn't realise that they were as likely to spend the night in jail as in a hotel, because Kurds regard all Arabs visiting from the rest of Iraq with deep suspicion.
The differences between Shia and Kurd explain why Iraq still doesn't have a new government three months after last December's elections. The current government is the one that took office in January 2005; based on a Kurdish-Shia alliance, it's headed by Ibrahim al-Jaafari of the Shia Dawa Party. Over the past year, Kurdish leaders have come to detest him and are refusing to agree to a new government with him at its head. They were enraged when he made a surprise visit to Turkey in early March in order (they feared) to enlist Turkish support in his bid to rob them of their quasi-independence within Iraq. Above all, the Kurdish leaders fear that Jaafari is manoeuvring to avoid implementing an agreement under which they would gain permanent control of the oil province of Kirkuk, which they captured at the start of the war.
Kirkuk, beneath which lie ten billion barrels of oil reserves, is a prize well worth fighting for. It is also, even by Iraqi standards, a depressing and dangerous city. It sits on the plain 150 miles north of Baghdad, overlooked by a citadel whose ancient houses were wrecked by Saddam Hussein after the failed Kurdish uprising of 1991. There are heaps of rubbish everywhere. Despite the oil reserves, there are mile-long queues of vehicles waiting to get petrol. Shops are small and mean. In the centre of the city a cluster of dilapidated market stalls sell fruit and bread. 'Kirkuk is a ruin, it is the most ruined city in Iraq,' a Kurdish official said, with bitter pride, as we drove through the city. Over the past fifty years the Kurds have been systematically expelled from Kirkuk. After 1991, a full-scale programme of ethnic cleansing began: between 120,000 and 200,000 Kurds and Turkomans were forced from their homes by Saddam. Almost all the small towns and villages in the province were bulldozed to reduce the Kurdish population and to prevent the buildings being used by guerrillas. The Iraqi constitution, along with the Shia-Kurdish agreement, promised to remove Arab settlers and return Kurds to Kirkuk. Grim place though it is, undisputed possession of the province and its oilfields is vital to the Kurds if they are to get close to self-determination.
Under the new constitution, the fate of Kirkuk will be decided by 31 December 2007. If Kirkuk joins the Kurdish region, the Kurds will have first rights to new oil discoveries. Saddam had not only denied them a share in oil revenues: any Kurd found working in the oil industry was sacked. 'Of the 9000 employees working for the Northern Oil Company in 2003, only 18 were Kurds, and they were mostly servants,' said Rezgar Ali Hamajan, the chief of Kirkuk's provincial council. Now the Kurds are intent on having their own oil. Given that the need to share oil income is almost the only thing holding Iraq together, the secession of Kirkuk to join the Kurdish Regional Government could be the decisive moment in the dissolution of the country.
Inhabited by Kurds, Turkomans and Arabs, Kirkuk is a good if unnerving place in which to observe the growing hatred between Iraq's ethnic communities. The Kurds won five out of nine parliamentary seats in the parliamentary election in December. 'Security is not as bad as in Baghdad,' said Rezgar Ali, a chain-smoking former land surveyor who was for years a Peshmerga commander in the Patriotic Union of Kurdistan (PUK), while admitting that this is not saying a great deal. He complained that the media exaggerate the violence in the city. 'One day a rich Kurdish lady was kidnapped,' he said. 'They claimed she was a female Kurdish leader. In fact it was just an ordinary kidnapping.' He conceded that many Arab police officers were probably collaborating with the insurgents and that several Arab police chiefs had been arrested. Like many Kurdish officials in Kirkuk, he wears a pistol in his belt and has a submachine-gun always close to hand. Whatever happens, he said, the Kurds 'won't leave Kirkuk. Even if we had only two thousand Peshmerga we would not leave here.'
But one recent development has shocked even Rezgar Ali. In the centre of Kirkuk there is a building that seems quite imposing compared to the ramshackle houses all around: this is the Republican Hospital. It is here that most of the casualties from gun battles, bombings and assassinations are taken. In 2005, some 1500 people were killed or injured in Kirkuk province. Large numbers of those taken to the hospital died, and there turned out to be an extraordinary reason for this. Some time earlier, the hospital had recruited an enthusiastic young doctor called Louay, who was always willing to help. What the other doctors didn't know was that Louay, an Arab, was a member of an insurgent cell of the Ansar al-Sunna group. He used his position to make sure that soldiers, policemen and government officials died of their injuries. A police inquiry found Dr Louay guilty of killing 43 patients. He doesn't seem to have found this very difficult. Many of the injured were bleeding when they reached the hospital and, according to Colonel Yadgar Shukir Abdullah Jaff, a senior policeman, 'Louay would inject patients he wanted to kill with a high dose of a medicine that made them bleed more.'
Given that Iraqi hospitals are invariably short-staffed and there is little time for autopsies, Dr Louay might have been able to carry on his killings indefinitely. But earlier this year Kurdish security in Sulaimaniyah arrested the leader of his cell. Abu Muhijiz, whose real name is Malla Yassin, confessed that Louay was a member of his group and detailed the grisly work that he had carried out.
In Kirkuk, the most effective military and police units are Kurdish. The same is true in Mosul, the mainly Sunni city on the Tigris further to the west. Nominally, there are 12,000 police in Mosul province, drawn mainly from the Jabour tribe. But according to Saadi Pire, the former PUK leader in Mosul, 'they are policemen only by day and terrorists at night.' The Sunni in Mosul, for their part, see what the US claims is a war against insurgents as an American-Kurdish attack on their community.
Across Iraq, the community-based allegiances of members of army and police units are sapping the power of the state. As sectarian and ethnic war escalates, people want militiamen from their own community defending their street, regardless of whether or not they belong in theory to the army or the police. In Sunni areas, the only people well enough armed to organise a defence are the resistance fighters, and the fear of Shia death squads swells their ranks. In Shia areas, sectarian bombings and shootings lead to greater reliance on the Mehdi Army of the nationalist cleric Muqtada al-Sadr. Meanwhile, the number of American casualties has decreased to about one a day, compared to two or three a day last year. The insurgents believe that the Americans are going to leave whatever happens, as support for the war diminishes in the US, and that attacks against US troops are therefore less urgent. But in the Sunni heartlands north of Baghdad, resistance is as strong as it has ever been. On 21 March, a hundred fighters armed with automatic rifles, rocket-propelled grenade-launchers and mortars captured a police headquarters and stormed a jail in Muqdadiyah, sixty miles north of Baghdad. By the time they withdrew they had killed 19 policemen, freed 33 prisoners and captured enough radio equipment to make the rest of the police network insecure. Provincial authorities claim the Muqdadiyah police chief was a resistance double-agent.
Solidarity within each community – Kurdish, Shia and Sunni – is strong. But none is monolithic. Iraqis in general are highly cynical about the honesty and competence of their own leaders. The four to five million Kurds have a strong sense of national identity and are well organised. Nevertheless, on 16 March thousands of Kurds marching in Halabja to commemorate the deaths of the 5000 people killed in the 1988 poison gas attack on the town burned down their own brand-new monument. It was a curious, circular building outside the city boundaries which housed a museum; from the distance it looked like a strange mosque. Opened by Colin Powell in 2003, it contained lifesize wax models intended to represent the dead and dying, and photographs of the dead. For two years, Kurdish officials had taken foreign officials to the monument as a symbol of Kurdish suffering under Saddam. People in Halabja, however, had watched the visitors with growing rage. Few of them travelled one mile further, into the town itself, to see the sufferings of the present-day inhabitants – for whom little had been done since 1988. Funds sent from abroad to help the survivors of Saddam Hussein's most famous atrocity never seemed to arrive.
I reached Halabja after the riot had subsided. The guards at the monument were still looking shaken. The building itself had been gutted by fire: long strips of plastic hung from one of the ceilings and several small fires were still burning. Kana Tewfiq, one of the Peshmerga guards, who'd been hit in the spine by a stone thrown from the crowd, said that protesters had taken 'gasoline and oil from the museum generator to get the fire going'. A second group of Peshmerga had arrived and fired into the crowd, killing a 17-year-old demonstrator and wounding half a dozen others. Shako Mohammed, the PUK leader and government representative in the Halabja region, came with a couple of carloads of bodyguards to survey the damage. He said he had begged people not to demonstrate while he took their demands to the PUK government in Sulaimaniyah. He suspected that the crowd had been infiltrated by members of the Islamic Movement of Kurdistan, which once controlled the region.
In the local hospital, a 29-year-old man called Othman Ali Gaffur was lying in a bed with a bullet through his leg. His injuries looked serious: he was missing part of his left hand and had only one eye. But these turned out to be the result of ordnance detonating when he was playing with it as a child. Othman worked as a journalist on the magazine put out by the handicapped people's association in Halabja, to which five thousand people belong. He said the first aim of the demonstration had been to keep government officials away. 'They were always promising us help but the help never came. There are no roads, no streets here, only mud. They only took people to see the monument to the dead and never to see the living. That's why it became a target.' Another man, Omar Ali, said he was against violence, but 'if we don't do something they won't listen.'
At this point several Peshmerga entered the ward and told me to leave. I refused to go, and they seemed divided on what to do. When I did leave they surrounded the car and said I should stay where I was while they rang their headquarters. When they finally got through, they were told to let me go. Later the PUK claimed that Islamic fundamentalists and shadowy pro-Iranian groups had fomented the riots. The next day in Kirkuk, a senior PUK official admitted that this was nonsense. 'What happened in Halabja could happen anywhere in Iraq because people look at what has happened to them and don't think their leaders are any good.'
Iraq is divided and the insurgency is strong, but the real reason for the collapse of Iraq is the weakness of the state. Ali Allawi, the finance minister, told me that corruption had reached Nigerian levels and that the government is just a parasitic entity living on oil revenues. It's not merely that a percentage of spending disappears into official pockets: entire budgets vanish. The US and Britain are trying to push Iyad Allawi forward as a sort of super-minister in charge of security. But while he was prime minister in 2004-5, the whole $1.3 billion defence procurement budget disappeared. Millions more were spent on a contract to protect the vital Kirkuk-Baiji oil pipeline but the money was embezzled. The few men hired to guard the pipeline usually turned out to be the same men who were blowing it up. Ali Allawi says the insurgency is largely financed by oil smuggling, and 40 to 50 per cent of the vast profits go to the resistance.
The moment when Iraq could be held together as a truly unified state has probably passed. But a weak Iraq suits many inside and outside the country and it will still remain a name on the map. American power is steadily ebbing and the British forces are largely confined to their camps around Basra. A 'national unity government' may be established but it will not be national, will certainly be disunited and may govern very little. 'The government could end up being a few buildings in the Green Zone,' one minister said. The army and police are already split along sectarian and ethnic lines. The Iranians have been the main winners in the struggle for the country. The US has turned out to be militarily and politically weaker than anybody expected. The real question now is whether Iraq will break up with or without an all-out civil war.
Most probably war is coming, but it will not be fought in all parts of Iraq. It will essentially be a battle for Baghdad between Sunni and Shia Arabs. 'The army will disintegrate in the first moments of the fighting,' a Kurdish leader told me. 'The soldiers obey whatever orders they receive from their own communities.' The parts of the country with a homogeneous population, whether Shia, Sunni or Kurdish, may well stay quiet. But in greater Baghdad, sectarian cleansing is already taking place. The place bears an ever closer resemblance to Beirut thirty years ago. The Shia Arabs have the advantage because they are the majority in the capital, but the Sunni should be able to cling on to their strongholds in the west and south of the city. The new balance of power in Iraq may be decided not by negotiations, but by militiamen fighting street by street.
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