Oakland, Calif.—With Monday morning’s surprise ceremony in Baghdad, transferring political authority from the United States to an interim Iraqi government, officials hope insurgents in Iraq will lose support, after attacks across Iraq killed more than 100 people last week, and insurgents captured and threatened to behead a U.S. Marine and four other foreign civilians over the weekend. But with more than 130,000 U.S. troops remaining in the country, a hand-picked Prime Minister who is a former CIA asset, and U.S. “advisors” running Iraqi ministries well past the changeover to a permanent Iraqi government, this interim government is not “fully sovereign” or representative of Iraqis, says Ivan Eland, Senior Fellow at the Independent Institute, a think tank in Oakland, California.

The best long-term chance for peace and prosperity in Iraq is probably a decentralized government in the form of a confederation or loose federation of states within the country, says Dr. Eland, a former defense analyst and foreign policy expert. “Only some form of decentralized arrangement in Iraq would lessen the fears of various factions, including the Sunnis, Shia, and Kurds, of being dominated by each other. It would insure genuine self-determination and enable the U.S. to leave Iraq with honor,” says Dr. Eland.

Each locality in Iraq could send a representative to a constitutional convention, without members of the U.S. military or occupation authority present. “The delegates would not only negotiate the future governing structure of Iraq, but also key issues such as the future distribution of oil revenues,” says Dr. Eland. “Iraqis would then ratify by referendum what the convention produced. More than likely, the constitutional convention would produce some type of confederation or loose federation similar to the Swiss canton system—giving substantial autonomy to various groups, tribes or regions—or even three or more independent states,” he says.

“In the current situation, many Iraqi factions are likely to retain their armed militias because they fear domination from other groups that might gain control of the central governmental apparatus of a unified post-occupation Iraq,” says Eland. He points to the recent Shiite street demonstrations as an indication that tensions have increased greatly between the Shia and Sunnis. Similarly, he says, “the Kurds threatened to walk away from the new interim government after becoming suspicious that their long-standing autonomy could become endangered by the Shiite majority. Such tensions and fears could ultimately cause a civil war.”

But the creation of a confederation, loose federation, or even a partitioned nation should reduce such fears and lessen the chance of internecine conflict, says Eland. “Of course, there’s no guarantee peace has much chance after the Bush administration foolishly opened Pandora’s Box by removing the only thing holding this fractious, artificial country together—Saddam Hussein. But Iraqi self-determination is the best remaining hope for peace in that country.”