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Three years have passed since US troops entered Baghdad and toppled the regime of Saddam Hussein. But violence, death and bloody clashes are still raging across the country today, making the idea of a "democratic and free Iraq" a pipe dream for most Iraqis.

Where is Iraq going? This is the question haunting not only the Iraqis, but also people the world over.

Iraq has been struggling in the mire of political chaos ever since the tanks rolled in, despite going through every step of the political reconstruction prescribed by the United States.

The interim Governing Council was set up in July 2003, followed by the establishment of the interim government in June 2004 and the National Assembly in January 2005 in quick succession. The referendum on the constitution was held in October 2005 and then the election of the formal parliament in December of the same year.

But no consensus has yet been reached by various political parties and factions over the organization of a new formal government. The political reconstruction agenda is at a standstill.

In the mean time, people's livelihoods are going from bad to worse. According to statistics released by the Iraqi Labor and Social Security Ministry, the intensity of poverty of the country has increased by 30 percent since April 2003, with poverty-stricken people making up 20 per cent of the general population and the number of the homeless hitting 2 million, surviving on less than US$2 a day.

The growth rate of the Iraqi economy is barely 5 percent annually, despite the favorable context of steadily rising oil prices.

The unemployment rate is hovering at a very high level.

Worse yet, terror attacks, in the form of suicide bombs and car bombs, rip through neighborhoods, supermarkets, police stations and barracks. Kidnaps and assassinations erupt one after another. All this serves to scare away foreign investors, not to speak of the mounting security worries on the part of the locals.

To make matters worse, sectarian strife between the Sunni and Shi'ite Muslims has escalated since the Gold Dome of the Askariyayn Mosque in Samarra, a holy site of the Shi'ites, was devastated on February 22.

So far, more than 200 mosques, either Sunni or Shi'ite, have been attacked and more than 500 people killed. Large numbers of the Shi'ites are fleeing the predominantly Sunni neighborhoods and vice versa.

The retaliation and counter-retaliation vendetta is threatening to enter a vicious cycle. Iraq is on the brink of civil war.

On the eve of the third anniversary of the US-led Iraqi War, American and Iraqi troops launched a massive military campaign against the insurgents near Baghdad, inflicting heavy casualties on them. But nobody expects the campaign to settle the major questions in the country once and for all.

First and foremost, a new government is struggling to materialize, which means that anarchy will continue to rule the nation. The lack of political leadership is chiefly explained by the political parties' lack of sense of compromise and responsibility in forming a national unity government.

At the negotiation table, the political parties representing interests of various ethnic and religious groups, for example, put forward extremely demanding requirements, which could never be met by opponents, to extract concessions. The negotiations, therefore, cannot proceed.

All this points to one thing: It is still extremely difficult to organize a new formal government. Even if it were set up, in the current scenario it could never be a powerful and efficient national unity government, instead serving as a stage for various political forces to maneuver for their own political gains and undercut each other.

Feuds between different religious sects and ethnic groups constitute another hard nut to crack.

Of the 25 million Iraqis, Arabs account for 74 percent of the total population and Kurds 21 percent. Ninety-five per cent believe in Islam, of whom the Shi'ites make up 55 percent and the Sunnis 22 percent.

But the Sunnis have long been in the ruling position while the Shi'ites and Kurds remained in a disadvantaged position. Ethnic and religious persecutions during the rule of Saddam Hussein fuelled the contradictions, planting the seed for conflicts today.

When Saddam's regime was overthrown, the status of Shi'ites and Kurds was greatly elevated and they later rose to the No 1 and No 2 players in Iraq's political arena, which suddenly disrupted the traditional power balance. The Sunnis, suffering a strong sense of loss, started armed resistance.

They first targeted the US troops, believing that it was the United States that had made their situation worsen. But with the progress of Iraqi democratization, the contradictions between the Iraqis themselves intensified. This has eventually led to the open sectarian struggles.

If the US troops and the Iraqi Government fail to effectively hold the sectarian clashes in check, Iraq could end up divided. A Kurdish leader recently said that the Kurds would seek de-linking from Iraq if civil war breaks out between the Sunnis and Shi'ites.

The Sunnis and Shi'ites are disengaging from each other and people from both groups are increasingly avoiding intermarriage, new worrisome phenomena.

Taking all this into account, it can be stated that Iraq is at a critical crossroads.

Mounting anti-US sentiments compound the deteriorating situation and help make terror organizations such as al-Qaida feel pretty comfortable operating in Iraq.

The al-Qaida cells in Iraq take full advantage of this and try to create more troubles for the US troops, carrying out multiple roadside-bomb attacks, abducting foreign nationals and so on.

They are also trying to play the Sunnis and Shi'ites up against each other by masterminding a series of incidents.

Now the terrorists and the ordinary Iraqis are intermingled, the efficiency of the US and Iraqi troops' military campaigns is very much reduced, which may also help largely explain the difficulties redressing the worsening security situation in Iraq.

The United States has been trying to bring about a pro-US democratic government, at the cost of 2,300 young American lives and US$250 billion.

But the United States has fallen far short of its goal. It feels increasingly difficult piloting Iraqi politics, with political reconstruction unfolding. Many of the US proposals are, for instance, being turned down by Iraqis, because they don't want interference in internal affairs.

The author is a researcher with the China Institute of Contemporary International relations.

(China Daily March 24, 2006)