Improved security, an expanding economy, and new understandings with Iran, Syria and Turkey are fomenting an almost forgotten emotion among leaders of Iraq’s Shia-led government: optimism. But for Sunni Arab neighbours in the Gulf, Baghdad’s returning confidence raises the ghosts of troubled times past. Saddam Hussein is no more; Iraqi nationalism never died. Mowaffak al-Rubaie, Iraq’s national security adviser, typifies Baghdad’s brash boosters. Speaking on the sidelines of a weekend security conference in Bahrain, he warned Saudi Arabia’s princely rulers and other Gulf potentates to watch out.

“We are out of the woods... We are building a new Iraq under a democratic parliamentary system. There is a new sense of belonging in Iraq,” he said. “These people should understand the new Iraq is going to lead the region in a new way, with democracy and a new nationalism and a western orientation. They should understand these upstart Shia are not going to go away ... Our strategic direction is very clear to everybody in the region. We are heading west.”

But refuting claims by hard-left western commentators and hard-right Iranian rejectionists, Rubaie told al-Arabiya television the pact did not give a green light to unending US occupation. Heading west did not mean knuckling under. “We need the US in our war against terrorism, we need them for economic and diplomatic and political support. But permanent bases in Iraq for any foreign forces is a red line that cannot be accepted by any nationalist Iraqi,” he said. The ceasefire by Muqtada al-Sadr’s Shia Mahdi Army, and a largely unpublicised US operation to clean up the interior ministry, have also been crucial.

US commanders scoff at claims that the Sunni resistance has made a tactical withdrawal in order to regroup. “The big summer offensive we were expecting to happen happened. Except we hit them first - and they lost,” a US official said. Parallel attempts by militias and death squads to turn Baghdad into “a Shia Arab city” were also thwarted, he said. Iraqi and American officials stress that the battle for Iraq is far from over. It could still turn pear-shaped if US troop withdrawals, commencing this month, allow the insurgents to hit back as coalition defences weaken. Much the same may hold true as Britain draws down in Basra. Flashpoints such as Kirkuk and the northern border with Turkey remain unpredictably dangerous, they say.

But like Rubaie, a senior Iraqi government adviser, who asked not to be identified, said he believed the past few months had brought irreversible changes. “What happened in Iraq? What happened was that after Saddam, both sides, Sunni and Shia, went too far,

much too far, and foreigners interfered,” he said. “Now we are coming back from the extremes.

An equilibrium is forming, a kind of balance. There has been a strategic shift.” This is not victory. But it is not defeat, either. And for Iraq’s nervous southern neighbours in particular, it may mean history is starting again. — The Guardian