According to US academic and Middle East expert Juan Cole, "Washington lost big" in the long negotiations over forming a new government in Iraq.
Parliamentary elections on 7 March 2010 put Iyad Allawi's Iraqiyya marginally ahead of outgoing prime minister Nuri al-Maliki's State of Law party, but gave neither a majority.
On 13 November the parliament finally convened, re-elected Kurdish leader Jalal Talabani as president, put a member of Iraqiyya in as Speaker of the parliament, and voted to call on Talabani to appoint Maliki prime minister. (Reports differ on whether Talabani has made the formal appointment, or only indicated that he will).
Iran president Ahmedinejad quickly congratulated Maliki in lavish terms, and declared: "The Islamic Republic of Iran is ready to deepen ties with the neighbouring and friendly country of Iraq". Maliki responded: "expansion of ties with Iran is demanded by Iraq as well".
The US administration, according to many reports, had been pressing to have Allawi, who did well in the election among Sunni Arabs, made president or, alternatively, joint prime minister with Maliki (each to hold the office for a period, in alternation). It tried to get the Sadr movement, a Shia-Islamist faction which until maybe 2008 had a large armed wing (the Mahdi Army) in on-off conflict with the US army.
The US lost on all counts. Allawi is to lead a new national security council, but it may have no significant powers. So dissatisfied was Allawi that he and other Iraqiyya members walked out of parliament after the election of Talabani as president on 11 November, returning only on the 13th.
Formally there will be a "national unity government" including all the main factions. Maliki's main base, however, is the various Shia-Islamist factions - his own "State of Law" group (an offshoot of the old Dawa party), together with other Dawa factions, the Islamic Supreme Council of Iraq (ISCI), and the Sadr movement.
They can ally with the Kurdish groups on the basis of common hostility to the old Sunni-Arab-dominated elite in Iraq, and a common bias towards large regional autonomy.
Before the March elections, Maliki tried to present himself as a "national unity" figure, downplaying religious and specifically Shia identifications, seeking Sunni-Arab allies, and advocating stronger central government.
He has swung back to the old axis of Shia-Kurdish alliance. This swing may sustain or even revive the continuing strand of Sunni-sectarian militia violence in Iraq.
Maliki lived in Syria when in exile under the Saddam regime, and is close to the Iranian regime, which keeps its options open by having links also with ISCI and the Sadr movement. Allawi lived in London (his wife and children still live here, or did so until recently), and had close links with the CIA.
Maliki has yet to appoint ministers or announce a government programme. The creation of a "strong" government would not have been good news for Iraq's harassed labour movement, which still has to operate under Saddam-era laws making most of its activities theoretically illegal, but this sort of "weakness" in the government offers nothing good either.