Civilians gather at the site of a car bomb exploded in a street lined with shops in the Iraqi city of Samarra, 62 miles north of Baghdad. (Bakr al-Azzawi/Reuters)

As the bombings increase and show no sign of letting up, and as many wonder if Iraq is about to descend again into the horrors of sectarian war; it's worth taking a good look at Iraq today and asking what is going on with America's greatest nation-building attempt since the Marshall Plan.

Any examination of the last 10 years in Iraq demonstrates that the main problem facing the country since 2003 has been the rise of armed groups outside the control of the central government, beginning with the anti-U.S. insurgency, which contained a terrorist component that still operates today with virtual impunity, and followed by the rise of the Shia militias, who were defeated on the battlefield between 2008 and 2011 but still possess their weapons. All the other indicators in Iraq are actually very good, especially for a post-conflict environment, but the spiraling violence now is especially distressing after the steady reduction in violence between 2007 and 2012.

The societal divisions that existed in Iraq in 2003 still exist today. There are the Sunni tribes of western Iraq; there are Sunni Islamists; there are Sufi groups; there are radical jihadists; there are Shia Islamists connected with Iran; there are Shia Islamists who follow the infamous Moqtada al Sadr, and there are Shia Islamists who follow the example of this father but not him personally. And then, of course, there are the majority of Iraqis, who are remarkably moderate, non-sectarian and secular in outlook. After the 2003 invasion, various elements of the Sunni community formed the backbone of the anti-coalition insurgency, and later Shia militias supported by Iran opened another front against coalition forces. In 2007, the Sunni insurgency began to reduce in force, and after 2008 the Shia militias were also pacified, eventually stopping their military activities by 2011. Today, although the same societal divisions exist, it is only the most radical Sunni jihadists who are fighting.

So, considering the current rise in violence, it might seem counterintuitive that there was a dramatic reduction between 2007 and 2012.

Reconciliation efforts and political outreach were important, but they were part of the puzzle, not the panacea. The increase in U.S. troops on the ground gave confidence to those who wanted to stand up to the militias, and the U.S. troop surge supported the efforts of Iraqi security forces to solidify law and order.

But there was more to it than that. In March 2006, Iraq’s Sunni community began to go through an existential crisis. In response to the murder spree launched by Shia death squads in the wake of the destruction of Sammara's Golden mosque that February, it began to see the U.S. as the lesser of two enemies. Mosques in Sunni areas of western Baghdad announced that it was permissible to fire on Iraqi security forces that entered neighborhoods unaccompanied by coalition troops. At that time the Iraqi defense ministry also warned on national TV that civilians should not open their doors or respond to Iraqi security forces unless they were accompanied by coalition forces. It was at this stage that the tribal anti-Al Qaeda militia force know as the Sahwa began to tip the scales against Al Qaeda's jihadists—and found a ready ally in U.S. forces. This was the beginning of the end of the Sunni insurgency against the U.S. But ultimately, the Sunni terrorists were not defeated by either the Sunni tribal Sahwa or the U.S. forces, just reduced in strength, and since 2009 they have gradually and carefully regained ground.

Since 2008, the government of Iraq and U.S. forces have followed a policy of carrot and stick with the extremist Shia militias; military action and political deals went hand in hand. Extensively defeated on the battlefield in 2008 since the withdrawal of U.S. troops in 2011, the Iranian-backed Shia militias have so far mostly refrained from violence. They have been accepted into the political system, forging alliances with major parties. Hence, a mix of suppression and concessions by the U.S. forces and the Iraqi government, pursued over several years, was the formula to bring the Shia militias off the streets.

In contrast, despite extensive military operations coupled with far-reaching reconciliation efforts by the coalition and the Iraqi authorities since 2006, terrorism from ex-Baathist and Al Qaeda affiliated terrorist groups continue. The terrorist element of the original anti-coalition insurgency, which killed so many U.S. soldiers and Iraqi civilians, has remained. It reduced with the rise of the Sunni tribal militias and the U.S. troop surge, but began to increase again in August 2009, with spectacular bombings against Iraqi government buildings that physically demolished several ministries. This was before political events that are often described as causing the upsurge in terrorism: Before the 2010 elections and government formation, before the departure of U.S. troops, before the exile of Vice President Hashemi on terrorism charges in December 2011, and certainly before the arrest of Finance Minister Issawi's bodyguards in December 2012. Since 2009, these groups have been carefully consolidating their power through violence and intimidation, killing hundreds of civilians each month, assassinating government officials and community and political leaders. These terrorist groups are now forcing the specter of sectarianism back into the Iraqi political narrative.

Essentially, the U.S. troop surge created space for the Iraqi security forces to gain control of the streets in order to concentrate on the Shia militias, but meanwhile Al Qaeda-affiliated groups went underground before re-emerging in late 2009 and launching their own surge in 2013.

The Iraqi government is searching for a means to deal with this security problem; the worst outcome would be for the Shia militias to take up arms to “defend” their community, as they did in 2006, thus leading to sectarian civil war. Already there are signs that the militias may return to the streets. Of course, sectarian civil war is what terrorist groups are aiming to foment, since they see continuing instability as the means to prevent the consolidation of Iraq's new democracy. Iraq's senior politicians, meanwhile, remain fearful of the return of Saddam Hussain's Ba'ath party, which tortured, imprisoned, and killed the family members of many of the country’s leaders. When demonstrators took to the streets in the aftermath of the arrest of the Iraqi finance minister's bodyguards in December 2012, they were carrying Ba'athist flags. Some were even waving al-Qaeda flags. And then in January 2013 Saddam Hussein's former deputy and surviving ranking member of the Ba'ath, Izzat Ibrahim al Douri, made an appearance on television, supporting the demonstrators. Meanwhile, across the border in Syria, the al-Qaeda franchises Jabhat al Nusra and the Islamic State of Iraq and Sham are growing in strength. Iraqis see the evidence for this on YouTube every day. The resurgence of the Ba'ath party and the resurgence of al-Qaeda, for Iraq’s Shia politicians, is all of their nightmares at once.

Now, the renewed terrorist campaign has finally brought sectarian polarization into the government.Nouri Al-Maliki, the prime minister who established himself as a non-sectarian nationalist by taking on Shia militias and running with significant Sunni leaders alongside him, is now being accused of sectarianism as he attempts to find a way to respond to Al Qaeda-aligned groups.

Iraq’s security crisis has morphed into a political crisis, but its ultimate origins can be found in the inability of either coalition forces or Iraqi security forces to eliminate the cell-based terrorist networks that grew up in the immediate post-invasion period.

Yet despite this terrorism, other national indicators are trending in a positive direction. Baghdad's parliament is the first free and democratic parliament in Iraq's history, and Basrah is enjoying an economic boom. For every oil barrel pumped in the province, Basrah will soon receive $5 of the revenues. In Baghdad, new shopping malls, boutique shops, and new cars are everywhere. Oil production and oil exports are higher than at any time since 1990, economic growth is leagues ahead of the rest of the Middle East, electricity supply (while struggling to keep up with the flood of new electronics) has increased by at least 17%, and will increase even further over the next 12 months. Most importantly, Iraq continues to hold regular democratic elections at the provincial and national levels that are judged free and fair by international observers.

Most of Iraq's political groups are now fighting in the political sphere, using all the levers of power and influence available; parliamentary democracy is alive and well. The maturity of Iraq's politics was demonstrated during the April 2013 provincial elections. Following these elections, rather than fighting in the streets, smaller parties used the levers of parliamentary democracy and gathered together to unseat Prime Minister Maliki's list in many provinces, just as politicians do throughout the democratic world.

None of this, however, should distract U.S. from the one factor that continues to destabilize Iraq: a vicious and unrelenting terrorism campaign. Terrorists limit foreign investment, they distract the government from focusing on delivering services, they generate fear in the community, encourage the rise of militias, and they are now increasingly bringing sectarianism into the political sphere.

Until Iraq's government is able to establish genuine security control across the country, this terrorism will continue to hamper stabilization and reconstruction. Iraq's security forces have not yet proven themselves up to the job, but neither were the coalition forces. And, meanwhile, Syria's crisis provides Iraq's terrorists with a refuge and inspiration. Insurgencies can run their course for decades. The anti-U.S. insurgency, which began in 2003, is still fighting, reduced to a vicious terrorist campaign but still aiming to deny victory to the new democratic system. Until we recognize that this is the central problem facing Iraq today, we cannot hope to begin to understand how to resolve it.

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