By Mohammed Abbas and Tim Cocks BAGHDAD, March 23 (Reuters) - Iraq has made some progress stitching together a society almost torn apart by sectarian violence, but grave challenges remain as the clock ticks down to a full U.S. troop withdrawal in 2011. Although the violence that engulfed the country after the U.S.-led invasion in 2003 has abated, reconciliation efforts between Iraq's ethnic and sectarian groups will determine if simmering disputes are resolved peacefully or lead to more bloodshed. Prime Minister Nuri al-Maliki, of Iraq's Shi'ite majority, has ramped up calls for reconciliation in recent months, invoking Sunni-Shi'ite brotherhood and national unity. "Gestures of goodwill are one thing; addressing concerns is another. He's not addressing them clearly and strongly enough," said analyst Laith Kubba, pointing to slow progress in implementing a law to re-hire former members of Saddam's Sunni-led government. Top civil servants had been obliged to join Saddam's Baath party, but most were fired by U.S. officials after the invasion, leaving Iraq bereft of qualified workers. "The question is: will Iraq withstand the big challenge a year from now when America starts pulling out, leaving a power vacuum?" added Kubba, a former Iraqi government spokesman. The government says it has made gains in bringing Iraqis together. It has re-hired thousands of members of Saddam's army dismissed by U.S. officials, a move that fuelled the insurgency. Disgusted by the violence committed by some insurgents, some 100,000 mainly Sunni armed men have joined neighbourhood patrols, set up by U.S. and Iraqi forces to fight al Qaeda. The government seems to be honouring a pledge to pay them until it finds them jobs in the security forces or ministries. OIL AND TERRITORY Thorny issues remain unresolved, not least a row over oil and territory between ethnic Kurds and Arabs in Iraq's north. Those disputes triggered dangerous standoffs between Kurdish and government forces last year. Ratcheting up rhetoric, Kurdish leaders have labelled Maliki a dictator on par with Saddam. Kurds have enjoyed virtual autonomy in Iraq's north since 1991, and are alarmed at efforts by Maliki to claw power back to the central government. "Maliki tries to make decisions without involving his partners in government," said Kurd lawmaker Saadi al-Barazanchi. Kurds consider the northern oil-rich city of Kirkuk their ancestral homeland and want to include it in the semi-autonomous region of Kurdistan. The dispute is one of several differences with the government that have delayed an oil law needed to fully exploit Iraq's vast oil reserves and rebuild after years of war. A review of the constitution to define the power balance between central government and regions has moved at a slow pace. "In terms of specific results, not much reconciliation has happened. The constitution has not been revised and there is no oil law," analyst Reidar Visser of www.historiae.org said. Without an oil law, foreign investment in Iraq's dilapidated oil sector is likely to be limited, hurting oil exports. CAUTIOUS OPTIMISM On the other hand, Maliki's crackdown on Shi'ite militias last year won him praise from Sunni politicians. An amnesty law passed last year has also led to the release of thousands of Sunni prisoners. "Iraqi parties are getting close to each other. Those who followed a marginalisation policy are now satisfied the country can only be run through the everyone's efforts," said Saleh al-Mutlaq, a prominent Sunni Arab lawmaker and former Baathist. Maliki, once seen as a hopelessly partisan Shi'ite, this month offered forgiveness for former Baathists who committed no crimes -- reiterating a government commitment to reconcile. Even Shi'ite cleric Moqtada al-Sadr, whose Mehdi Army militia once battled Maliki's troops, in February indicated willingness to forge alliances with Maliki and his allies. This new mood may carry through to December's parliamentary polls, when a new crop of lawmakers might replace those elected when Iraq was more polarised along sectarian and ethnic lines. "A new parliament is more likely to reflect the more mature political atmosphere than the current assembly," Visser said. A senior U.S. official in Baghdad was also optimistic. "The prime minister has done some significant outreach. The way they (Iraqis) have handled difficult issues suggests to us that they are serious about this." (Additional reporting by Khalid al-Ansary and Waleed Ibrahim, writing by Mohammed Abbas: Editing by Samia Nakhoul)
An activist shouts anti-government slogans while holding placards during a protest in front of a hotel in Manila March 23, 2009 where visiting former British prime minister Tony Blair will address ...
