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While Washington debates whether surging additional troops into Iraq is either feasible or wise, it’s possible we've been distracted from the main event. With strong White House encouragement, Iraqi politicians have been busy at home trying to put together a grand bargain that could transform the US debate, realign the Iraqi Government and possibly lead to a reduction in sectarian killing.

The deal appears to connect to the leaked memo by National Security Director Steven Hadley printed in the New York Times two weeks ago. It may explain why the White House sought to delay any announcement about the "New Way Forward" in Iraq while the President met with leaders of Kurdish and Shiite parties. The White House isn't undecided; they're waiting to see if the deal falls into place.

Three stories, two from the AP, here and here, and one from the Washington Post set the stage. The Post story, Shiite Cleric’s Rivalry Deepens in Fragile Iraq, provides helpful background on the rivalry between Moqtada al-Sadr and Abdul Aziz al-Hakim, the leader of SCIRI (Supreme Council for the Islamic Revolution in Iraq). That’s worth a read, especially if you’re the incoming Chair of the House Intelligence Committee.

The two AP stories describe negotiations that have been occurring over the past two weeks to form a new government coalition of supposedly “moderate” Shiite parties (including al-Hakim’s SCIRI and Prime Minister al-Maliki’s Dawa party), two Kurdish parties, and at least one Sunni party (Sunni Iraqi Islamic Party). The apparent goals have been to form a stronger central government across all sects to help reduce the sectarian killing, while reducing the influence of (if not isolating) the popular and powerful al-Sadr, whom US officials now regard as the most serious threat to US interests.

In the past, Iraqi negotiations have broken down over the new constitution, federalism, control over ministries, oil revenues, and so on, and they may do so again. But perhaps not. Within the last few days, the new coalition has met with Iraq’s most revered cleric, Grand Ayatollah Ali Sistani, to secure his blessing for its efforts. According to the NYT and AP stories above, they have succeeded, but on Sistani's condition that the new “moderate” coalition of Kurds, Sunnis and Shiites does not disband the existing Shiite Alliance favored by Sistani that also includes al-Sadr's Shiite group. So the new coalition members have met with al-Sadr, too. In the second AP report late Thursday, Iraqi sources report that al-Sadr has apparently agreed not only to rejoin the national government (you’ll recall he pulled his members out to protest al-Maliki meeting with Bush two weeks ago) but also to accept a reduction in sectarian fighting.

The AP stories speculate that the new coalition and Ayatollah Sistani’s blessing may have convinced al-Sadr to rejoin the government to avoid losing influence and to discourage the US from attacking his militia. But the condition al-Sadr demanded, and which the coalition reportedly accepted, is interesting:

"We will rejoin the government and the parliament very soon," the [pro-Sadr] lawmaker said. "We got some guarantees during our meeting today."

On Thursday, al-Sadr loyalists met with members of the Shiite bloc and laid out their demands, the lawmaker said.

"Our demands are to hand over the security file and not allow any regional interference in Iraqi affairs," he said, meaning, apparently, that U.S. forces must hand over all control of security forces to the Iraqi government.

So that's the deal: The Iraqis get a new, broad-based coalition to strengthen the national government. Key Shiite and Sunni parties agree to reduce the killing. The US nemesis, al-Sadr, rejoins the government, perhaps with a security responsibility, but he also accepts the need to reduce the killing. The deal has the blessing of the country’s top cleric, and the US government. The Iraqis claim they put the deal together themselves. Bush and Rice/Hadley can also take credit, and perhaps the "delay until January" was just a ruse to allow a suprise announcement just before Christmas (or New Years). And there's political cover for the US to announce they'll turn over control of security to the Iraqi forces.

Sound too good to be true? Probably; if this is just the "moderate" parties, we still have all the “immoderate” folks out there willing to continue the carnage (assuming the so-called moderates stop), including lots of disenfranchised Sunnis and any Shiites no longer controlled by Sadr or the coalition parties. Even within the coalition, there are tough conditions yet to be met that could cause the deal to fall apart, as Friday's NYT article notes. But at least this story is the first one to make sense of everything that has been happening for the last month. And it may explain why Secretary Gates, upon leaving Baghdad today, announced that the US and Iraqis were now in "broad strategic agreement."

This scenario still leaves some very major questions for the US. In particular, is there a purpose for the US “surge” (eg, to help enforce the deal)? If the Iraqis pull this off, would the Administration be persuaded to declare "Victory" and start removing our troops? Or would they use this as an opportunity to go after whomever they choose to define as the remaining “terrorists” and “enemies” in Iraq, creating more violence, more reprisals, and risking the deal? And is Sadr's powerful 60,000 man Mahdi Army one of those targets, if not first, then next? We know what the Cheney/neocons would do. Deal or no deal, this war is far from over.

Juan Cole has more on the underreported scope of the violence.

UPDATE: We get an important reminder of what "moderate" means from markfromireland (h/t Siun). After all, it's the SCIRI party that many believe to be associated with death squads and kidnappings by forces working for the Interior Ministry. And apparently the al-Sadr people are now denying they've agreed to reenter the Government. There are still lots of obstacles before this deal is done, if ever. Meanwhile, the LA Times reports (h/t rumi) that the top US Generals in Iraq are now on board for a "surge."