Table of Contents

1. Stability and Secnrity in Iraq ....È..ç..ç...uÈ.....-.-.-.....-ã.........Ñ.........-........,..J

-...

2. Iraqi Security Form Training and Performance................................................ 41

2.1 Progress in Training and Equippine the Iraqi Security Forces ...... . . . . . . 41
2.2 Progress in Assuming Leadership in Counter-Insurgency.... .............. ..... .. .. ..43
2.3 M m i w oflntenor.. ............................................... .... ......... .................. . .44
2.4 Ministry of Defense ..............................................................................................
52

3. TramsVmm .-..-............................................................................ S9
3.1 Transhioning Security Responsibility.................................................................... 59
3.2 U.S. Force Adjustments......................................................................................... 62

Thu report to Congrett on measuring stability id Becudty in Iraq im lubmined

-
pursuant to Section 9010 of the Department ofDetente Appropriation! Act 2006,
Public Law f09.148. Ttm is the fifth in a Èade of report* on thu fubiecc ¥o the
third under Section 9010. The most recent report w ~ submitted
s in May 2006.
 Executive Summary
This rewrt is divided into three sections. The
first section, "~tabilityand Security in Iraq,"
descmcs trends and progress toward meeting
goals for political siabihq strengthened eco-
nomic activity, and a stable security environ-
ment in Iraq. The second section, "Iraqi Secu-
rity Forces Training and Performancege-
scribes progress in the training, development.
and readiness of the iraqi Security Forces
([SF). includine the forces of the Ministty of
Defense (MOD) and the police and paramili-
tary forces of the Ministry of Interior (MOI).
The third section, "Transition," describes the
. .
transfer of securitv resnnnsibilitv from Coali-
lion fixccs to the Iraqi g-nemmm, including
prerequisite conditions und cr term for assess-
ing the readiness of provinces to assume
responsibility for security.
A classified annex to this report provides data
concerning security force training and per-
formance and addresses possible U.S. military
force rotations.
The information in this report is made avail-
able with the assistance of many departments
and agencies of the U.S. Government, the
U.S. Embassy in Iraq, Multi-National Force-
Iraq (MNF-I), and the Government of Iraq.
The report complements other reports and
information about Iraq provided to Congress
and does not replace them. The intent of this
document is to report on the measures of sta-
bility and security specified in Section 9010.
Mfsures of Srsbllln a d S u w l n and rhe
NortonalSrrarem for Vcron in Ira@
The President's National Strateav for Victory
L&%g lays out the goals and general h e -
work to achieve security and stability in Iraq.
The goal of the strategy is to help the Iraqi
people build a new Iraq with a constitutional
NY TIKES
and representative government that respects
political and human rights and with sufficient
security forces both to maintain domestic
order and to prevent iraq from becoming a
safe haven for terrorists. To this end, the
United States is pursuing an integrated strat-
egy along three broad tracks:
Political: Helping the Iraqi people forge
a broadly supported compact for demo-
cmic government
Economic: Assisting the Government
of iraq in establishing the foundations
for a sound market economy with the
. capacity to deliver essential services
Securitv: Contributinc to an environ-
ment where Iraqis are capable of defeat-
ing terrorists and neutralizing insurgents
and illegal armed groups
Each track is integrated with the other two,
and success in each affects success in die
others. Security depends, in part, on a demo-
cratic political process, which in turn
depends, in part, on economic opportunity.
Economic progress depends on securing the
Iraqi infrastructure against sabotage and
- the iraai. .pco~ie
attack and .orotectine . from
violence that undermines individual participa-
tion in economic development and the poiili-
cal process
Although the N & o & m w v for V i a d
is mt a detailed pim for achiwimg spe-
cific objectives, consistent with the public
nature of that document, it delineates measur-
able trends along each of these tracks to
indicate where programs are achieving suc-
cess and where it is necessary to increase
efforts or adjust implementation of the
strategy.
 I bor 22.1008 EMctKMiof PrÑktenc Council by Counel of toofw.nfUv
h m l w U m of Prtme rnt'dstw D#P m s n - r l
The President's suatcg) also identifies eight
objeaives, or pillars, of the .ntegrated politi-
cal. economic, and security strateey:
Defeat the terrorists and neutralize the
insurgency
Transition Iraq to security self-reliance
Help Iraqis forge a national compact for
democratic government
Help Iraq build government capacity
and provide essential services
Help Iraq strengthen itseconomy
Help Iraq strengthen the rule of law and
. promote civil rights
Increase international support for Iraq
Strengthen public understanding of
Coalition efforts and public isolation of
the insurgents
Key indicators of progress since the last
report are discussed below.
Political Proercss.This report marks the first
90 days of the first representative govmment
NY TIMES
11
in Iraq. The appointments of the Ministers of
Interior, Defense, and State for National
Security Affairs, on June 8,2006, marked the
completion of a national unity govemment
Within one month of seating this government,
Prime Minister Nouri al-Maliki presented a
"National Reconciliation and Dialogue
Project" to the Iraqi Council of Representa-
tives (CoR). This project is a broad initiative
aimed at reconciling past inequities; rallying
Iraqis around a principle of equality, devoid
of sectarian divisions; firmly establishing the
basis of national unity via a democratic politi-
cal process; and creating the conditions for
Iraq to assume a leading role both in the
region and internationally. Additionally, the
CoR began its work in June with an accel-
crated schedule of sessions. Most of the
24 Council Committees have formed and
named chairs. The CoR is making some pro-
gress on key legislation required to implement
the provisions of the Iraqi Constitution.
 m m i c ActMly. The Iraqi economy cmt-
tinues to show progress, but still needs to
overcome serious challenges, As the Govern-
ment of Iraq was formed jusi 90 days ago, its
institutions are still forming or arc immature
and consequently struggle with many macro-
economic issues. The new governem has
. -
=firmed its commitment to o r o m s sun-
ported by the Stand-By Arrangement with the
. levels and nature of violence in Iraq affect all
International Monetary Fund (IMF) by taking
important and decisive measures, notably
price increases for refined petroleum products
that meet IMF targets. The Executive Board
of the IMF subsequently completed its first
. .
and second reviews of Iran's nerfmance
under the Stand-By Arrangement
August 2, 2006.
Iraq continues to make progress reducing its
Saddam-era debt. As of July 2006. 17 of 18
Paris Club creditors have signed bilateral
agreements to forgive 80% of Iraq's sever-
eign debt. Russia is the only Paris Club
creditor that has not yet signed a bilateral
igreement with Iraq. It has, however, agreed
in principle on debt relief terms and will
finalize an agreement shortly. Middle Eastern
creditors, which hold the majority of the
present debt, have not signed bilateral debt
reduction agreements.
Average peak electrical generating output
increased 15.8% this quarter to 4,573 mega-
watts (MW) and continued to increase over
the quarter. Iraq averaged 14 hours of power
per day this quarter, an improvement of
3 hours per day over the previous quancr.
Crude oil production for the second quarter
improved 18% to 2.2 million barrels per day
(mbpd), and exports improved by 20%, to
1.6mbpd. Also during this quarter, Iraq
resumed exports from northern fields for the
first time since the autumn of 2005. However,
oil production and exports still fell short of
the Iraqi goals of 2.5 mbpd and 2.0 mbpd,
NX TIMES
respectively. Approximately 90% of the Gov-
ernment of Iraq's revenue comes from oil
exports, and higher prices for Iraqi oil con-
tinue to somewhat offset lower than desired
export volumes.
The Security Envlmrnenl. Setbacks in the
other measures of stability, reconstruction,
and transition. Sectarian tensions increased
over the past quarter, manifested in an
increasing number of execution-style killings,
kidnappings, and attacks on civilians, and
increasine numbers of intemaltv .
. dis~laced
persons Sur-ni and Shi'a extremisis, panicu-
larly al-Qacda in Iraq and rogue elements of
Jajsh al Mahdi (JAM), are increasingly inter-
locked in retaliatory violence and are wn-
testing control of ethnically mixed areas to
expand their existing areas of influence. Con-
cern about civil war within the Iraqi civilian
population and among some defense analysts
h r e u s e d in recent months. Conditions
that could lead to civil war exist in Iraq.
Nevertheless, the current violence is not a
civil war, and movement toward civil war can
be prevented. Breaking the cycle of violence
is the most pressing goal of Coalition and
Iraqi operations.
In the current reporting period the average
umber of weekly attacks Increased 15% over
the previous reporting period average, and
Iraqi casualties increased by 51% compared
to the previous quarter. Much of this violence
occurred in Baghdad, as terrorists, insurgents,
and illegal armed groups recognized and
exploited the political and economic signifi-
cance of conducting operations in the capital
city. However, the Coalition and the Govern-
menl of Iraq continued to make progress this
quarter, improving the security environment
in Faliujah and some parts of northern Iraq.
Although sectarian violence threatens the
effectiveness of the Government of Iraqi,
terrorists have failed to derail Iraq's political
process, or to widen their political support
amone die Iraoi neonle. Polline data continue
~-
to show the confidence of most seemenis~~-
the Iraqi people in the Iraqi Army and their
of
rejection ofal-Qaeda's vision of Iraq's future.
v MOD
. and MOI sew-
rity forces continue to increase in size and
capability and are increasingly assuming the
lead combat responsibility from Coalition
forces.
Training, equipping, and fielding security
forces continues. Approximately 277.600
Iraqi soldiers and police have completed ini-
tial training and equipping, an increase of
more than 14,000 in the three months since
the last report. As of August 2006, approxi-
mately 84% of the objective end-strength of
MOD forces have been trained and equipped,
while more than 92% of authorized Iraqi
Army battalions have been generated.
Remaining train-and-equip efforts will focus
on building combat support and combat
service support forces.
More Iraqi units are able to take die lead in
combat operations against the insurgency and
to assume security lead in their territory. The
number of counter-insurgency operations con-
dueled independently by Iraqi forces as a per-
centage of total combat operations continues
to increase steadily. Approximately one-third
of the company-sized operations in Iraq
during the reporting period were conducted
independently by Iraqi forces. As of August 7,
2006, there were 85 Iraqi Army battalions
(5 divisions, 25 brigades) that have assumed
the lead for counter-insurgency operations, a
35% increase since the last report. All 27
National Police battalions are currently con-
ducting counter-insurgency operations, and
2 National Police battalions have the security
lead for their areas of responsibility.
Transition. Iraq achieved a historic milestone
on July 13,2006. with the transfer of security
responsibility in Muthanna Province from
MNF-I to the Provincial Governor and the
civilian-controlled Iraqi Police Service (IPS).
Moreover, since the May report, MNF-1 has
transferred an additional 10 Forward Operat-
ing Bases (FOBS) to the Government of Iraq.
Forty-eight of 110 FOBS are now under Iraqi
control.
 1. Stability and Security in Iraq
1.1 Political Progress
The goal of the political process in Iraq is to
help the Iraqi people forge a broadly sup-
p o d national compact for democratic gov-
ernment thereby isolating enemy elements
from the broader public. The United States is
supporting this effort by:
supporting Iraqi leaders in their efforts
to include all Iraqis in the political pro-
cess, through dialogue and inclusive
institutions;
offering advice and technical support
.
for effective governance;
helping build national institutions that
transcend regional, sectarian, and tribal
lines; and
assisting Iraqis in replacing the corrupt
and centralized Ba'athist system with
effective government bodies at local,
provincial, and national levels.
Measures of political progress and stability
include:
achievement of political goals set forth
in the Iraai Constitution, as well as
those in united Nations Security Coun-
cil Resolution 1546 and the Transitional
AdministrativeLaw;
formation of a national unity govern-
mem representative of all Iraqi wm-
munities:
participation in the political process by
all Iraqi communities and evidence that
they view the process as legitimate and
effective;
adherence to rule of law institutions;
and
expansion of internationalsupport
HY T U B S
With the seating of its constitutional govern-
mnt, Iraq, with the support of the Coalition,
completed all the milestones required under
United Nations Security Council Resolu-
tion 1546.
l l ~ Nsional
e Stratem for&oo& lays
out a spcofK three-pronged political plan to
assist the Government of Iraq in building a
broadly supported national compact for demo-
cratic governance. The plan seeks to:
"^Isolate enemy elements from those
who can be won over to the political
process by countering false propaganda
and demonstrating to all Iraqis that
they have a stake in a democratic Iraq;
^ Engage those outside the political
process and invite in those willing to
turn away from violence through ever-
expanding avenues of participation;
and
^ Build stable, pluralistic, and effective
national institutions that can protect the
interests of all Iraqis, and facilitate
Iraq's full integration into the intcrna-
tional community."
After successful national elections in Decem-
ber 2005, Iraqis made the commiment to
establish a broad unity government. Rather
than allocating all government positions to the
majority party or coalition, this unity govern-
merit sought to provide fair representation in
the ministries and other government posts
- . .
amonr all maim nartics that won seats in the
CoR. Consistent with this commitment. Prime
M.nistcr al-hlaliki announced and *on CoR
approval for m i cabinel. which d'ans mtnw
ten and senior officials from parties repre-
senting all regions, sects, and ethnic groups.
The announcement met the constitutionally
mandated deadline, but Prime Minister
al-Maliki opted to delay filling the positions
of Minister of Defense. Minister of interior,
and Minister of State for National Security
Affairs to ensure broad support within the
CoR for these sensitive positions.
On June 8, 2006, after additional negotiations
and compromise, the Prime Minister pre-
sented his nominees for the two security
ministries. The CoR approved the appoint-
ments by a majority, confirming Jawad
al-Bulani as Minister of Interior and Abd
al-Qadr Muhammad Jassim al-Muhji as
Minister of Defense. The CoR also approved
Organizational Structure of the Govarnmant of Iraq
Pmldency council EXKUUV Brancti
the appointment of S h i m al-Waili as Min-
iser of State for National Security Affairs.
The appointment of the Ministers of Interior,
Defense, and State for National Security
Affairs marked the completion of Iraq's first
representative government, The resulting
cabinet is remarkably inclusive. The new gov-
ernment reflects the diversity of the Iraqi
people and, with a freely elected parliament
and a popularly ratified constitution, isa shik-
ing contrast to the oppressive, one-man rule
of Saddam Hussein just three years ago.
Poll data indicates that the majority of Iraqis
have confidence in the new government;
notably, however, confidence levels are
lowest in mixed and predominantly Sunni
areas, such as Kirkuk and TikriWBaquba.
Branch
~egislative
 How much confidence do you have In the new Iraqi
governmentto Improve the eltuaflon In Iraq?.

The Iraqi Constitution, adopted by popular
referendum on October 15, 2005, requires
approximately 55 enabling or implementing
acts, in such significant and broad areas as
judiciary development and economic reform,
to make the Constitution operative. Passing
and enforcing this legislation will be a key
indicator o f progress for the new Government
of Iraq.
Additionally, the CoR began its work in June
with an accelerated schedule of sessions.
Most of the Council Committees have been
fanned and have named chairs. The CoR has
made some progress on key legislation.
including progress toward new Electoral
Commission legislation, the first step on the
.path to provincial
. elections. However. little
substantive legislation was passed in the
session that ended in July.
The two critical political events facing the
CoR and the Government of Iraq over the
next few months are the constitutional amend-
ment processand provincial elections.

HY TIMES
 ProgressToward a D~fnOCratlcIraq 2006
Imql Gowmmmt Fonntlon
The National Reconciliation Process
On June 25. 2006. Prime Mini* al-Maiiki
presented 10 the CoR a 'National Reconcilia-
tion and Dialogue Project." a 24-point initia-
five aimed at reconciling past inequities,
rallying Iraqis around a principle of equality
devoid of sectarian divisions.
The National Reconciliation and Dialogue
Project is intended to open dialogue, reduce
sectarian tensions and violence in Iraq, and
increase commitment to the democratic pro-
cess and the new national unity government.
The project will operate on three levels. At
the national level, the High National Commis-
sion of the National Reconciliation and Dia-
logue Project will be composed of reprcsenm-
tives from a diverse cross-section of political,
religious, ethnic, tribal, and cultural groups
under the leadership of the Minister of State
for National Dialogue. The second level will
be provincial subcommittees, and the third
MT TIMES
level will be field committees, which will
focus on key components of national recon-
ciliation and will evaluate progress.
As part of the National Reconciliation and
Dialogue Project, a conference of tribal
leaders took place on August 26. 2006, in
Baghdad that resulted in a statement
condemning sectarian violence, and endorsing
the reconciliation plan. In the coming
months, the government will convene a
conference of religious scholars. The govern-
ment is supposed to convene a conference of
political parties to encourage the democratic
process and to solidify support for the
Government of Iraq.
GovernmentInstitutions
To achieve unity, security, and prosperity,
Iraq must develop the capacity to deliver gov-
eminent services to its citizens at the national.
provincial, and municipal levels. The Govern-
ment of Iraq must transform the country from
a centralized stale, with delivery of essential
services traditionally controlled by powerful
bureaucrats, to a responsive federal govern-
ment with decentralized control This change
will take time. consistent mentorshin. and an
empha&ison both promoting transparency and
reducingcormpiion The Coalition is support
ing these efforts at all levels o f the Govern-
ment of Iraq
National Institutions
National institutions and forces are essential
to displace illegalarmed groups and to serve
moderate sectarian and local loyalties. The
United States supports the development of
non-sectarian institutions and the growth o f
independent media and civil society institu-
tions, while continuing to encourage the Gov-
ernment of Iraq to proceed with the
-
Organizations Supporting Iraqi Ministries
announced and planned national reconcilia-
tion process.
The diagram below shows the organizations
currently helping Iraq develop its capacity to
govern effectively. Ministerial capacity dcvcl-
opment is the main focus of the U.S.
Embassy's Ministerial Assistance Teams
(MATS). These teams, composed of civilian
and military experts in governance and organ-
izational development, mentor and train both
the Iraqi ministers and their senior staffs in
such areas as budget development and execu-
tion, inter-ministry coordination, personnel
management, and procurement. Iraq Recon-
struction Management Office (IRMO) offi-
cials ~rovideex~crtisein kcv sectors, such as
oil, electricity, and health, to Iraqi ministers
and other high-level government officials.

Provincial Reconstruction Teams (PUTS)
work with provincial governors and elected
councils to improve execution of provincial
government responsibilities and to increase
citizen participation in governmental deci-
ion-making processes. The teams are
intended to develop core competencies in
public administration, finance, budgeting,
planning, and accountability by boosting
government capacity and transparency at the
provincial level. Four U.S.-led PRTs are fully
operational: PRT Tamim (Kirkuk), PRT
Ninewah (Mosul), PRT Babil (Hillah), and
PRT Baghdad. The security situation in some
provinces hampers interaction twtween the
team and provincial leaders.
Promotine the Rule o f h
Political stability in Iraq is predicated on the
effective rule of law in the country. (Note:
Police and associated institutions are dis-
.
cu-i-wl in Section 2 of this renor0, Effective
rule of law in Iraq, as in any country, requires
four conditions to be met: effective laws,
police to enforce them, courts to administer
them, and prisons lo incarcerate offenders. If
any one of these institutions fails, or cannot
work with the others, the Iraqi regime will be
unable to enforce the rule of law. The United
Stales, its Coalition partners, and intemat.onal
agencies are helping Iraq strengthen the rule
d law. Although there have been some posi-
tive developments, delay in the formation of
the Government of Iraq resulted in a loss of
momentum; rule of law initiatives slowed,
which contributed to the growth ofcrime, cor-
mption, and illegal armed groups.
The Iraqi Constitutionsets forth a comprehen-
sive list of rights and freedoms, but additional
legislation is needed to implement those gum-
antccs. The Constitution maintains the inde-
pendence of the judicial branch, but vests
considerable authority in the CoR to define
the functions of the courts, raising the risk of
undue influence by political or religious
groups. Iraq's criminal legal framework is not
presently robust enough to adequately address
contemporary criminal activity, such as
organized crime, trafficking, and some tech-
nology-related crimes. Legal experts from the
U.S. Government are assisting Iraqi legal
scholars in creating a legal system that can
balance the requisites of modem international
law with Iraqi cultural and legal traditions.
The Coalition continues to provide admmis-
W i v e support as well as technical and legal
assistance in drafting legislation.
The Coalition has helped the Government of
Iraq improve the judicial system in several
areas, including building or renovating court-
houses, expanding the Central Criminal Court
of Iraq (CCCI), and improving security. The
CCCI, for example, now has 12 panels
operating throughout Iraq. It processes, i
average, 118 insurgency-related cases each
month. Due to the limited capacity of the
11 panels outside Baghdad, the Baghdad
CCCI is the primary facility for hearing insur-
gency cases.
Poor security for judges and judicial facilities,
an insufficient number of judges, and an
inadequate court infrastructure undermine
advancements in the rule of law in Iraq.
Judges are subject to intimidation and in
many areas are afraid to prosecute insurgents.
The U.S. Government, through the U.S.
Marshals Service, responded by providing
secure housing, personal security details.
courthouse protection, and personal protection
firearms to some members of the Iraqi
judiciary. In Baghdad, the Coalition has pro-
vided facilities for 22 judges to reside in the
 [nternational Zone. Working in conjunction
with MNF-I, the U.S. Marshals Service has
begun training an Iraqi Marshals Service. The
U.S. Department of Justice, along with the
U.S. Departmentof State and 1heU.S. Depart-
ment of Defense, is proceeding with plans for
the renovation and construction o f Iraqi
courthouses and other related court facilities,
including witness protection buildings. As of
July 21, 2006, approximately 20 projects lo
improve judicial capacity have been com-
pleted, and 13 more are under way. Five addi-
tional projects are planned.
The US. Department o f Justice estimates that
Iraq needs 1,500 judges, yet only about 740
judges are currently serving. The Iraqi
Ministry o f Justice's (MOJ) Judicial Training
Institute has enrolled a new class o f 180
students (40 judges and 140 prosecutors) i n a
2-year program to train new judges and
prosecutors. When this class graduates in the
fall o f 2007, there will still be a significant
shortfall in judges. To help address this need,
the Iraqi Chief Justice recently nominsted 200
lawyers to serve as investigative judges. If
these judges are confirmed, the number o f
judges will rite 10 940. By the fall o f 2007,
approximately 980 judges will be serving i n
Iraq, an increase o f 32%, but still well short o f
the requirement.
The MOJ is responsible for imprisoning con-
victed criminals and insurgents i n Iraq. MOJ
prisons generally meet international slam-
dards, but are already at maximum capacity.
As a result, many detainees spend time in
M O I or MOD facilities, which g e m l i y fall
short o f internationally accepttd standards. To
address this issue, the U.S. and Iraqi govern-
ments are funding construction o f seven new
MOJ prison facilities, one each i n Basrah,
Khan Bani Sa'ad, Nasiriyah, Dahuk, and
Baladiyat, and TWO in Rusafa. Work has
Ni TIMES
stopped at Khan Bani Sa'ad and Nasiriyah
due to problems with the primary contractor.
Bridre contracts have heen awarded to local
Iraqi contractors to provide site security and
to perform some continuing construction
work. The Gulf Region Divtsion o f the U.S.
Army Corps of Engineers anticipates that
contracts will be issued to a new contractor in
September and that both facilities will be
completed in April 2007. Construction at the
two Rusafa facilities has been delayed due to
a title dispute between the Ministers of Justice
and Interior. The this dispute is currently in
litigation i n the Iraqi courts. Dahuk, a
1,200-bed facility in the Kurdish region, is
scheduled for completion i n February 2007.
Construction at Baladiyat was completed and
the prison facility there has been activatedand
is currently in use by the Iraqi Corrections
Services. Upon completion i n mid-2007, all
o f these facilities will add a combined 4,800
beds. Even with these additions, however,
projections show another 20,000 beds will
ultimately be needed. Thus, the Government
if Iraq must address insufficient bed space,
enactment o f custody transfer laws, abuses in
M O I and MOD detention facilities, and the
need for more guards and trained supervisors.
The Government of Iraq also faces the
problem o f prisoner-detaineesawaiting adju-
dicationlresolution o f the charges against
them. The M O I and M O D are believed to be
detaining between approximatcl~ 2,000 and
10,000 pcopic m pre-uial status, many in
crowded, substandard facilities
Security Internees
In addition to criminal detainees and convicts
held by the Government of Iraq, MNF-1 holds
security internees (or detainees) under the
authority o f United Nations Security Council
Resolution 1637. As o f July 16, 2006, Coali-
tion forces held 12,388 such security internees
outside the Iraqi criminal system. Detainees in
MNF-I custody are treated in accordance with
 Geneva Convention principles. The U.S. Gov-
ernment has initiated a dialogue with the
Government o f Iraq i n an effort to transfer
these internees to Iraqi custody. However,
Iraq currently lacks the legal authority to hold
security internees outside of the judicial
system. Therefore, neither MNF-I-held
detainees nor MNF-l-run detention facilities
can presently be hansitioned to MOJ control.
The Coalition continues to urge the Govern-
ment o f Iraq to accept transfer of security
internees i n a way that ensures their humane
treatment. Those detainees who do not pose a
serious threat to the citizenry are released as
oromotlv as oossible. (The detainee release
bog& is described in more detail later i n
this report.)
The Government o f Iraa has made a oublic
commitment to eradical'e corruption and to
empower anti-corruplion institutions. Coali-
tion support for this effort is focused larger
on the three main anti-corruption insticutiots
in Iraq: the Board o f Supreme Audit (BSA),
the Commission on Public Integrity (CPI),
and the Ministerial Inspectors General (IG).
Brtth the BSA and CP1 h a w new cftnstitu-
tianal slaws and the CPI has become the !cad
Iraqi MI!-conuption agency The CPI lias
investigated 1,158 cases this year
The CCCI, which has jurisdiction for public
corruption cases, does not have the capacity
to process all its corruption cases. There are
826 criminal cases pending or under active
prosecution.Over the past 20 months, 56 offi-
cials in Iraq's minishies were either convicted
or subject to arrest warrants. The fact that
there is a functioning process for investigating
and prosecuting corruption. and that some
corrupt officials are being brought to justice,
is a positive sign. However, the ability of the
government to prosecutecorruption cases sue-
cessfiilly is hampered by the lack of enabling
HY TIMES
legislation, lack o f CCCI capacity, and intimi-
dation o f investigators and judges.
to Political Progress
Since the liberation o f Iraq, there have been
significant successes i n the development of
- .
Ieaitimatc mlitical institutions and nrocesses.
7 ~~~-
The unfolding ofthe democratic electoral pro-
cess w c r the course o f 2005 %as a crucial
success. Despite these achievements, how-
ever, the political process has encountered
obstacles.
The nature of violence in Iraq is muttifacctcd.
Illegally armed groups that reject the political
process often do so because of long-standing
grievances, extremist beliefs, tribal affilia-
tions, andlor personal vendettas. No one mi-
egy can address every grievance. A vocal
minority o f Iraqis (e.g., religious extremists)
fundamentally opposes the idea of a demo-
cratic Iraq. Further, some Iraqis who have
joined the political process are condoning or
maintaining support for violent means as a
source o f political leverage.
The continued violence i n some areas, espc-
dally i n Baghdad, hampers the formation o f
legitimate national institutions. I n some towns
and neighborhoods, local illegal armed groups
are seen as the primary providers o f security
and basic social and essential services. With
the extended delay in formation o f the
national government and capable ministries,
these armed groups have become more
entrenched, especialb in some primarily
Shi'a sections o f Eastern Baghdad and certain
Sunni neighborhoodsin Western Baghdad
Security issues (e.g., the attempted kidnap-
ping o f a deputy minister and threats to minis-
try personnelwho work with Embassy teams)
have made same ministers reluctant to have
 US. personnel visit them. This reluctance
hampers coordination between the Coalition
and some ministry personnel. Internal politics
(e.g., political party affiliation) is also an
obstacle to progressin some ministries.
Some Iraqi ministers tend to focus on tear-
term performance, rather than on long-term
capacity building. A lack of effective proce-
dures within the ministries, such as policy
development, procurement, and budgeting,
was endemic to the Iraqi government under
Saddam Hussein, and three years is not
enough time to reverse decades of organiza-
tional incapacity. This situation should
improve with lime.
Lack o f proper "tools," such as information
technolow. finance %stems. and nlanninc.
capabilities, inhibit the governing of complex
- 1.2
issues The rewit is that Iraqi plannmg, budg-
eting, and execution processes are less than
fully effective. IRMO is currently procuring
and developing these tools, but it will take
time-years rather than monthsÑbefor
Government o f Iraq staff is able to use these
tools fully and to manage the ministries to full
effectiveness.
Iran and Syria undermine the Government o f
Iraq by providing both active and passive
support to anti-government forces that tend to
fuel &no-sectarian tensions. The Coalition
and the Government o f Irad have acted to
i-ounter ihc Iranian and Syr an influence by
tightening security at the borders. However,
the borders are porous, and eliminating the
transfer of illegal material and foreign fighters
into Iraq is a formidable challenge.
NT TIMES
Corruption in the ministries has farther ham-
pered their capabilities. Experienced or tal-
ented employees are often purged and
replaced with party elements/cronies as a
result of a spoils system. Many of Iraq's
political factions tend to view government
ministries and their associated budgets as
sources of power, patronage, and funding for
their parties. Ministers without strong party
ties often face significant pressure from the
political factions, and sometimes have little
control over the politrcally appointed and
connected people serving under them. Still
entrenched in the culture o f the former
regime, some ministry personnel arc reluctant
to exercise independent initiative or to lake
any bold action to address Iraq's problems of
corruption.
Economic Activity
The for V'itow h
underscores three objectives in helping the
Iraqis build their economy:
. Building the capacity of Iraqi institu-
tions 10 maintain infrastructure, rejoin
the international economic community,
and improve the general welfare of all
Iraais
~eformingIraq's economy, which has
been hindered by war. dictatorship, and
sanctims. so that it can DC self-sustain.
. ing in the future
RestoringIraq's neglected infrastructure
so that it can meet an increasing
demand and the needs of a growing
economy
TXis strategy rouIuis ow the Ne@&
ncwinnmfnt O f the
Government of Iraq, whose national eco-
nomic objectives are:
Strengthening the foundations of cco-
nomic growth
Revitalizing the private sector
Improving the quality of life
Strengthening good governance and
security
The formation of a new government allowed
Iraq to refocus on its economic agenda. In the
second quarter, the new government affirmed
its commitment to the reform program sup-
ported by the Stand-By Arrangement and is
moving forward with implementation of that
program. The new government maintained
fiscal discipline, raised domestic fuel prices to
the targeted levels in the Stand-By Arrange-
ment, sent a fuel import liberalization law to
the CoR, and increased targeted support for
the poor. The Executive Board of the IMF
subsequently completed its first and second
review of Iraq's performance under the Stand-
By Arrangement on August 2,2006.
Although the Government of Iraq missed the
March 2006 deadline for the state fuel-price
increase required by the Stand-By A r r m p
ment for refined petroleum products, on
July I, 2006, the new Government of Iraq
increased prices (reducing subsidies) for
regular and premium gasoline, benzene, lique-
fied petroleum gas (LPG), kerosene, and
diesel products, thus meeting or exceeding the
IMF Stand-By Arrangement-mandated price
increases.
Inflation threatens the overall macroeconomic
stability that Iraq has maintained since the
war ended. Ongoing violence and supply dis-
mptions are pushing prices higher The
Central Bank of Iraq (CB1) must further
tighten monetary and exchange rate policy to
prevent high inflation from becoming
entrenched.
Iraq continues to mçk progress reducing its
Saddam-era debt. Iraq's debt was estimated a
USSl25 billiin afler the war. This was almost
five times the gross domestic product (GDP)
in 2004, on unsustainable burden on the Iraqi
economy. The historic November 2004 debt
relief agreement with the Paris Club members
and subsequent agreements with commercial
and other official creditors, as well as some
on-Paris Club creditors, are helping bring
Iraq's debt to suslainabie levels.
As of Jul) 2006, all 18 Paris Club creditors
except Russia had signed bilateral apwmcnts
to forgive 80% of Iraqi sovereign dcbt owed.
Russia is expected to sign an agreement with
Iraq soon. In addition, Iraq has completed its
program to restructure commercial claims
from mmmmial and other official creditors.
.
Paris Club - USS41.7 billion owed
before signed b i l a t d s ; US$34.2
billion will be forgiven under Paris
Club tenns, including a future Russian
agreement.
Non-Paris Club sovereign debt -
approximately US$63 billion owed
(USS2.75 billion worth of debt relief
agreed to on USS3.3 billion worth of
debt, thus far),
Commercial and other official creditors
- debt relief deals completed on
USS19.7 billion of commercial and
other official debt.
As long as Iraq continues its progress on
implementing the economic reforms in the
IMF Stand-By Arrangement, the country will
remain eligible for the final 20% of debt
reduction acreed under the Paris Club terms.
Sixti percent of the Government o f Iraq's
deb' 10 Pari'i Club members has already been
forgiven, and continued successful comple-
 tion ofthe Sland-By Arrangement will qualify
Iraq for a final tranche of 20% in late 2007 or
early 2008.The United States forgave all of
Iraq's debt (US$4.1 billion) and is encourag-
ing other creditors to follow this example.
Debt relief from non-Paris Club credit- is
expected in accordance with Paris Club terms
or better, and Iraq is beginning to approach
these creditors to ask for debt forgiveness.
The Gulf countries hold the largest amount of
Iraq's non-Paris Club debt. estimated to be
USS45 billion.
In addition to loans, Iraq owes nearly
USS32billion in war reparations (as of
May 1,2006). These reparations are the result
of claims against Saddam's regime following
the Gulf War in 1991. Every year, 5% of
Iraq's oil revenue goes to repayment of war
reparations. As of May 2006, Iraq had paid
more than US$20 billion in reparations. The
United Nations Compensation Commission,
which oversees the payment of reparations,
awarded USS21.5 billion in compensation to
oil companies, which lost profits and equip-
ment during the Gulf War. Paying these
reoarations each vear. while simultaneouslv
attempting to rebuild its economy, places a modules will increase the transparency of the
significant strain on Iraq's limited resources.
The economic institutions of the new Iraqi
government arc still developing. On July 12,
Prime Minister al-Maliki outlined his vision
for economic reform to build a prosperous
Iraq based on private sector activity and
investment, economic diversification, and
integration into the global economy. The
Coalition is working with the Government of
Iraq to appoint an Ambassador to the World
Trade Organization (WTO) and to complete
the necessary documentation to hold its first
WTO Workine , In addition. the United
- Pam.
States contmucs to work w h the M i n i m of
bin- TO implement a Financial Manage.
HY TIKES
ment lnfonnation System (FMIS) that will
provide m t c r transparency and account-
ability in the government's budget and expen-
diture processes.
As of July 1, 2006, halfway through Iraq's
fiscal year, the Government of Iraq's minis-
tries have spent far below their planned capi-
tal budget expenditures. Iraq's new ministries
do not have experience executing ministerial
budgets, and lack of a modem electronic
transfer system, which has hampered trans-
ferring funds in locations around the country,
compounded by security problems, contrib
utes to an under-expenditure. The Govern-
mem of Iraq's continued inability to execute
its budget places delivery of basic services, as
well as future economic expansion, at risk,
and demonstrates the need for continuedjoint
U.S.-Iraqi capacity development efforts.
IRMO will soon develop contracts to install
government-wide budgeting and procurement
modules to add to the FMIS. which was
installed approximately two years ago;
however, the Government of Iraq is just now
starting to use this system. These new
financial system and will im~rovc the
effectiveness of in-year and forecasted
budgeting. It is proposed that the Minister of
Finance require all Government of Iraq
financial transactions to use this enhanced
FMIS system. Budgets are not effectively
delegated from the Ministry of Finance
(MOF) to other ministries and provinces. The
procedures to enable contracts through the
MOF are proving too cumbersome, and offi-
cials are not willing to risk applying perceived
"incorrect procedures," as several officials
have been detained with investigations pend-
i n into possible breaches of regulations.
Communications between the CBI and the
MOF have all but stopped; several employees
at the CBI have been intimidated and have
therefore failed to show up for work.

The United States is working with the Gov-
ernment of Iraq to engage Iraq's neighbors
and the international community on the future
of Iraq and the stability of the region. A
sustained dialogue with key international
partners remains a critical element in assisting
Iraq's nascent democracy. In this context, last
month Prime Minister aI-Maliki traveled to
Saudi Arabia, Kuwait, and the United Arab
Emirates to promote his national reconcilia-
tion plan and to encourage international sup-
port for Iraq.
In late July, the Government o f Iraq and the
UN, with the strong support o f the United
Slates, the United Kingdom.
- . and other donor
states and international financial institutions,
launched an Intemationai Compact with Iraq.
The ln'.emational Compact will, over the next
five years, bring together the international
community and multilateral organizations to
help Iraq achieve its national vision. The gov-
crnmenl's vision is that, five "cars from now.
Iraq % II oe a untied, federal, and dcmocrmic
country, i t peace with .&neighbors and itself,
well on its way to swainable economic sc'f-
sufficiency and prosperity, and well inte-
grated in its region and the world.
The International Comoact will nrovide assis-
tance to Iraq under a contractual agreement,
Iraq will undertake specific economic and
political reforms designed to bring it into the
global economy, [n return, international
donors will increasetheir financial support for
Iraq's reconstruction. Meanwhile, the Gov-
eminent of Iraq will continue to mact politi-
cal and security measures to achieve national
reconciliation and to build an economic envi-
ronment conducive to sustained economic
growth. The UN now occupies its compound
in Jrbil, end a UN Liaison Detachment has
been established in Kiikuk.
The Arab League issued a strong statement
following its November 2005 "Preparatory
Meeline for the National Accord Confer-
.
ence? calling for all Irani , oarties and Arab
states to support Iraq and respect the political
will of the Iraqi people The United States
welcomes the planned Arab League-spon-
sorcd Iraqi National Accord Conference (to
be scheduled) as an opportunity for Iraqis
inside and outside o f government to discuss
the many crucial issues facing their country
and to support a process o f national reconcili-
ation. Since the November 2005 conference,
the Arab League has opened its office in
Baghdad and has appointed Mukhtar Lamani
as its envoy.
Economic indicators are collected and pub
lished regularly, largely through the Iraqi
Ministry o f Planning and DevelopmentCoop-
eration and international organizations, such
as the World Bank, the UN, and the IMF,
although gathering accurate statistics on
which to base such indicators in the present
security situation in Iraq is a challenge. As
outlined in the table below, projections from
the IMF assume that economic growth over
the medium term will remain dependent on
the performance o f the oil sector, as it
accounts for more than two-thirds o f Iraq's
GDP. The outlook also assumes that the
Government of Iraq's investment in the oil
sector will generate increased ail production
and strong GDP growth over the medium
term.
 GDP Eftimams and project lo^, 2004-2008
Estimates of unemployment i n Iraq vary
widely. The UN World Food Program's 2005
estimate is 13.4%- other estimates are as high
is 50%-60%. As o f July 2006, the Govern-
ment o f Iraq Central Organization for Statis-
tics and Information Technology (COSIT)
estimated that unemployment was 18% and
underemployment was 34%. The COSIT
estimates were corroborated by a 2005 United
States Agency for International Development
(USAID) survey and recent nationwide
polling. This year, the Government o f Iraq
budgeted to increase employment from
1.1 million to 1.9 million civil servants. State-
owned enterprises are expected to add another
100,000 people ro their rolls. Although this
hiring will reduce unemployment, govern-
. . ,
ment and state-owned-enternrise emnlovment
is not a long-term panacea, for cxamp.e, most
state-owned enterprises arc operating under
capacity or are closed. The key to long-tern,
sustained reduction in unemployment can be
achieved only through private sector-led
growth. The U.S. Government is working
with the Government of Iraq to develop the
Iraqi private sector by reforming the banking
system, providing micro-credit lending and
vocalional Training, and enacting legislation in
NY TIMES
such areas as privatization and investment to
spur economic growth.
Using data collected i n 2004. the UN World
Food Program estimates that 15.4% o f the
surveyed population in Iraq lacks adequate
food. Including both severe and moderate
forms, about 25.9% o f the Iraqi children
examined were stunted in their physical
growth, a symptom o f chronic malnutrition.
The lowest rate observed (14.2%) was in
Sulamaniyah Province, while the highest
(36.5%) was i n Salah ad Din Province.
With supporl from USAID, the Miniaries o f
Finance, Labor, and Social Affairs have
developed a more effective social safety net
. .
for Iran's coorest citizens. This initiative
helps low-income fami ics manage the effects
of subside reform, using needs-adjusted cash
benefits and services that help families raise
themselves above the poverty level. The
social safety net program is an essential step
in reforming national subsidies as required by
the I M F Sland-By Arrangement. The Govern-
ment o f Iraq is still registering eligible house-
holds i n a continuing effort to reach those
Iraqis most in need of help. To date, the
Government of Iraq has enrolled more than
520,000 people in the social safety net
program.
High inflation is threatening Iraq's overall
macroeconomic stability. Inflation continues
to be volatile, with spikes generally caused by
commodity shortages and seasonal variations.
The annual inflation rate from June 2005 to
June 2006 was 52.5%. according to COSIT.
The CBI needs to :ake steps to control infla-
tion. Polling data indicate that the Iraqi
public's perceptions of the household finan-
cial situation are mixed, although public
perceptions are generally more pessimistic
than they were a year ago.
There is evidence that Iraqi private sector
activity continues to expand. The IMF esi-
mates that mn-oil GDP growth in 2006 will
be 10%. Various U.S. Government agencies
 attempting to spur private sector activity
with microfinance loans, bank lending to
small- and medium-sized enterprises, capital
market development, business skills develop-
men; vocational training, investment promo-
tion, business center support, and creation of
economic zones.
 Howwould you rate economic conditions In
Iraq today?

Monthly Consumer Price Index (% Change)

'*- " '

*MI

-.
*<R,*y^/^^^^A^A@.'l!'Â¥A*<l'^<

HY T U B S
 1 New B u s i n e s s Registrations (Cumulative)
Oil Production, Distribution, andExpor1
When Coalition forces began Operation Iraqi
Freedom, they entered a country whose
energy infrastructure had deteriorated over
many years. The Coalition set out to help the
Government of Iraq restore oil facilities,
increase production, improve refining of
natural gas production, and maintain pipeline
facilities. Poor maintenance, insurgent
attacks, slow repair, and corruption have
slowed progress. Beyond attacks on various
worksites, terrorists have attacked crude
export and petroleum product pipelines,
impeding exports and the refining and dis-
tribution of petroleum products, such as
gasoline and diesel.
Despite these challenges, crude oil production
for the second quarter improved by 18% lo
2.2 mbpd, and exports improved by 20% to
1.6 mbpd. Nevertheless, oil production and
exports still fell short of the Government of
Iraq's goals (2.5 mbpd and 2,O mbpd, respec-
tively). Due to B combination of increased
exports and higher prices for crude, oil reve-
nues improved in the second quarter, and will
reach budgeted targets by August 2006.
NY TIMES
During the past quarter, Iraq resumed exports
from northern fields for the first time since
the autumn of 2005, though on a very small
scale. Expons are expected to increase once
three major crude pipelines from Kirkuk,
including a new 40-inch line, are put in
service in September 2006.
Demand remains essentially unchecked for
state-subsidized refined petroleum products.
The Government of Iraq announced reduc-
tions in fuel subsidies on June 21, 2006; on
July 1,2006, in accordance with the Stand-By
Arrangement, these subsidies started being
phased in at government-run stations. In June
2006, the government increased prices for
fuel sold through official outlets, in accor-
dance with its commitments under its IMF
reform program to decrease fuel subsidies.
Regular gasoline (85 octane) in Iraq is cur-
rently regulated at about USW.55 per gallon,
while premium gasoline (92 octane) is regu-
lated at about US$0.90 per gallon. The
premium gasoline price is at the IMF target
price. These prices arc roughly equivalent to
the pump prices in Kuwait and Saudi Arabia,
but substantially less than in Turkey, where
gasoline is heavily taxed. This disconnect
between supply and demand leads to black
market activities and corruntion. Efforts are
 Oil Production
May-June 2006
under way to encourage the Government o f
Iraq to adopt legislation allowing private
imports of premium fuels at market prices.
This legislation should allow the refined fuel
market to clear and help ease the frequent
shortages. I t should also help reduce the
rampant crime and corruption associatedwith
the current fuel production and distribution
process.
The Bayji refinery in northern Iraq is a critical
element in Iraq's national oil infrastructure.
Built in the 1980s. the Bayji refinery is Iraq's
largest and newest refinery. This refinery
typifies many o f thechallengesIraq faces as it
attempts to modernize its aging infrastructure
and increase its oil exports. Bayji has a nomi-
nal productioncapacity o f 310,000 bamls per
day. However, since May 2006, the refinery
has not produced more than 170,000 barrels
per day, and recent production has been as
low as 7,500 barrels per day. Four primary
factors have limited production at the Bayji
refinery: maintenance issues with key com-
ponents in the refinery, an inefficient refining
MY TIMES
process, an unreliable flow o f crude oil into
the refinery, and security threats to personnel.
Maintaining the refinery's outdated equip
men1 is a challenge. Two o f the refinery's
three plants have been shut down since May
2006 due to mechanical breakdowns, sched-
uled maintenance, power outages, and fires.
One power outage damaged the refinery's
USS20 million hydrocracker, a critical piece
ofequipment used to convert heavy fuel oil to
usable products.
A second factor limiting production at Bayji
is inefficiency in its refining process. For
every two barrels o f crude oil brought into the
refinerv. Bavii nroduces about one barrel of
usableproduct, for an efficiency rate of about
50%. modem refineries can have efficiencies
ofW% or higher The re-iult o f the inefficient
refin ng process is a large amount o f heavy
fuel oil (HFOf byproduct Ra,,, does not have
adequate facilities to refine further. store, or
dispow o f lais byproduct; the excess HFO
thus interfere<w t n production and storage of
usable products.
 Production at Bayji is also affected by 1 e
interrupted flow of crude oil into the refinery
from Kirkuk through three key pipelines. The
flow has been periodically halted by c m o -
sion, fires, maintenance, and attacks, all of
which serve to hamper production of refined
products and crude oil for export. Construc-
tion of a new 40-inch line is scheduled to be
completed in September 2006.
The electrical generation and distribution
system in Iraq suffers from unscheduled
downtime due to the fragile condition of the
electric arid. sabotage. and Boor maintenance
practices. In addition, shortfalls in petroleum
production and d.stnbution lead 10 occasional
fuel shortages for electric gerwators.
Despite problems, peak capacity and hours of
power continue to improve. During this
reporting period, peak generating output was
5,283 MW on July 17, 2006, with an average
peak generating output of 4,573 MW over the
HY TIMES
period. This .s an improvement of 15 8% o\cr
thc previous reporting period. Iraq averaged
14 hours of power per day this quarter, an
improvement of 3 hours per day over the pre-
vious quarter. Baghdad averaged 8 hours of
power per day, twice what it had averaged six
months earlier.
As Iraqis purchase additional electric appli-
ances, demand few electricity continues to
increase. Estimated demand over the 30-day
period ending July 15, 2006, was 8,928 MW.
To date in 2006, the highest daily peak supply
was 5,283 MW, 2% below the 2005 peak of
5,389 MW. With all state-owned generators
running, theoretical maximum output is
8.551 MW, or 96% of this estimated new
demand. However, that level of output has not
been achieved, nor could it be sustained if it
were achieved. The Government of Iraq's
goal for average peak generating output by
the end of December 2006 is 6,000 MW per
day. During limes when state-generated elec-
tric' is not available, many Iraqis meet their
ek$cily requirements through private
 1 Average Dally Hours of Electrical Power per Province
Aprll-June 2008
generators. Electricity usage in Iraq appears to
be in accordance with or less than regional
norms. Nonetheless, the data support the con-
tention that the current connected capacity is
not sufficient to support agrowing economy.
The subsidized state distribution rate affects
electricity demand, and current electricity
rates are nominal, well below regional aver-
ages. In addition, not all Iraqis pay for their
state-supplied electricity. About 70% of
homes have meters and are billed. Of those,
about 70% pay their electric bills. The rate
billed is equivalent to US$.002/kwh. Owners
of private neighborhood generators bill their
customers at a rate about 40 times higher,
around US$.08kwh.
The communications sector continues to
expand, although this expansion is slowing
down in comparison with its explosive growth
immediately after the fall of the previous
regime. Whereas the number of landlinc sub-
HY TIMES
scribers is relatively stable, the three major
cell phone companies continue to enroll sub-
scribers. IFWO reports that, as of July 25,
2006, there were 7.1 million cellular tele-
phone subscribers and 1 million landline con-
nections. This reflects an increase in cellular
subscribers since the last report. The number
of cellular telephone subscribers has doubled
o r the last nine months. The state-owned
Internet service provider (ISP) currently
serves 197,310 subscribers, a slight decrease
since May 2006. This figure excludes private
ISPs and public Internet cafes. It is unknown
whether expansions of private sector ISPs
drew customers from the state-owned service.
U.S. Government projects continue to support
improved conmuni&t~onsamong Iraqi nun-
isincs Thirty-five of 42 govemmcm sues in
Baghdad, theCB1. and two state-owned banks
arenow connected via the wireless broadband
network. The U.S. Government continues to
train Iraqi telecommunications engineers on
proper operations and maintenance proce-
dures to maintain and broaden this network.
 1 Cumulative Communications Subtcriber Data
New projects have "added capacity to provide
1estimated 4.2 million people with access to
notable water-an increase o f 11 million
people since the Ma) 2006 reportÑbu direct
mcasument of water actually delivered to
Iraqis is not availaole"' Additional projecb
currently under way should increase infra-
structure capacity to provide access to clean
water to as many as 5 million more people.
Obstacles to Pmsress
There is significant black market activity in
Iraq, much o f it in oil products. Although
crude oil can be sold on the black market,
refined product requires less handling, can be
sold almost anywhere, and is more difficult to
trace, thereby making i t more profitable.
Much o f the black market and cornpiion
activity centers on refined products, such as
gasoline, benzene, LPG, and diesel.
Although the increases in the official prices
have reduced the economic incentive to
smuggle fuel, smuggling fuel for resale inside
' Special Inspector General Iraq Reconstruction
(SIOIR)rcpon,30 April 06, http://www.slgir.inil.
1
and outside the country remains a serious
issue. Turkey, where high taxes keep gasoline
pricednear USS5 a gallon, is a lucrative target
for smugglers. However, a significant portion
o f illegal trade results i n constraining the
supply ofgasoline in Baghdad, giving motor-
ists few alternatives t o purchasing black
market fuel at increased prices. Some pipeline
interdictions are due to insurgent attacks.
while some are botched attempts to steal fuel
. .. -.
bv taooine" into a flowinc oroduct line. Other
incidents include deliberate acts of sabotage
iirended 10 manipulate the fuel suppl, 10 spur
increased profits for black marketeers and
corrupt officials.
Black market prices for fuel vary by refined
fuel type: Benzene typically sells for 3-5
times the government establishedprice, white
LPG has recently been selling for 10-20 times
the official price. This gap between the
offtcial price and the black market price pro-
vides a strong incentive for corruption. The
U.S. Embassy has engaged the Government
o f Iraq to follow through on their staled com-
mitment to encourage liberalization o f the
retail file! market through enactment o f the
Fuel Import Liberalization Law being con-
sidered by the CoR. This reform wilt allow
the private sector to import fuel and sell i t at
market prices. This step is viewed with con-
troversy in Iraq. Economists predict that
private sector retail vendors of petroleum
products would undercut the illegal market,
thus driving them out of business once the
Government of Iraq passes the import liberal-
ization law.
1.3 The Security Environment
Defeating the enemy, breaking the cycle of
violence, promoting reconciliation, and transi-
timing security responsibility to the Govern-
ment of Iraq remain the top goals in the secu-
rity track. To achieve these goals, the United
States, its Coalition partners, and the Govern-
ment of Iraq are focused on objectives that
include:
 neutralizing enemy effectiveness, influ-
ence, and ability to intimidate;
rapidly reducing sectarian violence and
eliminating death squads;
i c i n g the capacity of the Govern-
ment of Iraq and its security structures
and forces to provide national security
and public order; and
helping Iraq strengthen rule of law
capabilities in the areas of law enforce-
ment, justice, and the corrections
system.
Indicator's of the security environment
include:
composition. strength, and support for
groups that threaten security and stabil-
ity: anti-government and anti-Coalition
forces (the "enemy");
activity, support, and efforts to disband,
. disarm, and reintegrate militias,
attack trends (including the number of
attacks and their effectiveness);
 levels ofsectarian violence:
. Iraqi public perceptions of security and
. security institutions; and
capabilities of the ISF and Iraqi
institutions.
Information about the ISF is presented later in
this report.
OverallAssessment of the Security
,Environment
During this reporting period, attacks and
civilian casualties have risen, characterized by
ethno-sectarian attacks and reprisals. Violence
escalated notably in Baghdad, which, as the
political, population, and media center of the
country, is a high-value target for terrorists
Violence in Basrah also rose, partly in
response to British actions against the JAM.
The death of terrorist Abu Musab al-Zarqawi
in June was a major success for the Coalition
and the Government of Iraq, but al-Qaeda in
Iraq remains able to conduct operations due to
its resilient, scmi-autonomous cellular smc-
lure ofcommand and control. Terrorists have
failed to advance their primary objectives,
which include derailing Iraq's political
process and widening their political support
among the Iraqi people. The Iraqi Army took
the lead in more counter-insurgency opera-
tions and assumed security responsibility in
more areas since the last report. The Iraqi
people continue to express confidence in the
Iraqi Army to provide for their security and to
reject al-Qaeda in Iraq's vision of Iraq's
future, but they are increasingly turning to
militias and neighborhood watch groups to
provide security from sectarian violence.
Overall attack levels are higher than last
quarter. In particular, attacks have increased
in southwestern Diyala Province and in the
cities of Mosul and Kirkuk. Extremists seek-
ing to stoke ethno-sectarian strife have
increasingly focused their efforts on civilians,
inciting a cycle of retribution killings and
 AI-Qaeda i n Iraq Influence
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driving civilian casualties to new highs. Much
o f this violence is focused on Baghdad, as
terrorists, insurgents, and illegal armed groups
recognized the political and economic signifi-
cance o f the capital city. As described below,
the Government of Iraq and the Coalition arc
taking significant steps to reverse the upward
trend o f violence i n Baghdad.
RecentDevelo~mentsIn the SecurlQ
Environment
Rising sectarian strife defines the emerging
nature o f violence i n mid-2006. Since the last
report, the core conflict in Iraq changed into a
struggle between Sunni and Shi'a extremists
seeking to control key areas in Baghdad,
create or protect sectarian enclaves, divert
economic resources, and impose their own
respective political and religious agendas.
Death squads and terrorists are locked i n
mutually reinforcing cycles of sectarian strife,
with Sunni and Shi'a extremists each portray-
ing themselves as the defenders o f their
HY TIMES
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respective sectarian groups. However, the
Sunni Arab insurgence remains potent and
viable, although its visibility has been over-
shadowed by the increase i n sectarian
violence.
On June K, 2006. Iraqi Prime Minister
al-Maliki announced the government's plan to
provide improved security conditions in
Baghdad. Operation Together Forward, or
Amaliya Ma'an ;/a A/-Amam i n Arabic, con-
sists o f increased checkpoints, curfews, and
enforced weapons bans to reduce sectarian
violence i n focused areas within Baghdad.
Security forces are also conducting raids
against terrorist cells and death squads. As
part o f this operation, Iraqi poiice, the Iraqi
Army, and National Police, supported by
Coalition forces, increased patrols and check-
points i n all areas o f Baghdad, while concen-
trating on areas ofthe city that have witnessed
increases i n violence and sectarian killings.
Security forces also worked to block terrorist
i t r y into the capital city.
 The confluence of high attack level-any
tarsetine civilians~andthe increased sec-
tarin %iolcnce. combined with the need to
r e that the Government of Iraq maintains
momentum in polit cal progress and counter-
insurgency, made Baghdad security a decisive
element in the campaign. Given the com-
plexity of the security situation in Baghdad,
.-
the Iraai sovernment olanned to execute and
complete Ama11,a Ua'an ila Ai-Amam over a
period of months, not weeks After the first
north of A m a h a Ma an ,lo Al-Amam, the
operation had arrested bat had not reversed
the high attack levels seen in May and June.
The average of 23 7 attacks per day across
Bashdad's It) districts was virtuallv un-
changed from the 23.8 average daily attacks
that occurred the month prior to the operation
Moreover, the rate of sectarian-motivated
murders and execution-style killings con-
tinued to rise, primarily in and around
Baghdad.
In July, during the prime minister's first visit
to the United States, Prime Ministerel-Maliki
and President Bush announced an adjustment
to the Baghdad Security Plan. One'of the key
changes is an increase in security force levels
in the city. Elements of the Call Forward
Force were brought forward from Kuwait and
other Coalition and Iraqi units were reposi-
tioned from less active areas of the country. In
addition. the Secretary of Defense extended
the 172nd Stryker Brigade Combat Team's
deployment in Iraq for up to 120 days.
Because the 172nd was largely successful in
working with the ISF to improve security in
northern Iraq, it has been repositioned into
Baghdad.
In addition to Increasing force levels in
d i d , the Coalition and the Government
of Iraq developed and refined tactics, tech-
niques, and procedures designed to reduce the
sectarian killings. A primary focus is elimi-
nating the death squads responsible for the
NY TIMES
predominance of the execution-style killings
and other murders in the city. The death
squads have fomented sectarian violence, as
killings prompt further killings of revenge.
Coalition forces and the [SF are also targeting
the death squads and other illegal armed
groups using checkpoints, patrols, driving
bans, curfews, weapons-law enforcement,
intelligence-driven operations, and other
methods. The ISF will rely on their training,
experience, and familiarity with Baghdad's
m u to focus on neighborhoods with the
highest levels of violence. Coalition forces
remain in a supporting role and will he
employed as requested by Prime Minister
al-Maliki and directed by the MNF-I com-
manding general.
The two primary objectives of the security
operations in Baghdad are rapidly reducing
sectarian violence by de-legitimizing the
illegally armed groups and establishing the
ISF as the dominant security presence. The
changes described above represent a con-
certed, focused effort by the Coalition and the
Government of Iraq. By strengthening the
capacity of the Government of Iraq and
spurring economic growth in Baghdad, the
United States will help the Government of
Iraq succeed in protecting its population and
restoring the confidence of the Iraqi people in
their future.
The Nature of the Conflict
Violence in Baghdad is the most prominent
feature of the conflict in Iraq in this period, as
Sunni and Shi'a extremist death squads
pursue their sectarian agendas. The resulting
violence overwhelmingly targets civilians,
s i n g segments of the populace to tolerate
or even endorse extremist actions on their
behalf as an effective means to guarantee their
safety, undermining both the Government of
Iraq's ability to deliver security and its pursuit
of a reconciliation program. Although
Baghdad remains the focus for sectarian and
terrorist violence in Iraq, violence tied to the
Rejectionist insurgency, terrorist intimidation,
political and tribal tensions, and criminality
continue in other regions. Sectarian violence
is gradually spreading north into Diyala
Province and Kirkuk as Sunni, Shi'a, and
Kurdish groups compete for provincial
iifluence. Conflict in Anbar Province remains
centered on the Sunni insurgency. Although
alQaeda in Iraq continues its intimidation to
coerce passive Sunni support, tribes are
pushing back to eject al-Qada in Iraq and re-
establish their dominant role. In the southern,
predominantly Shi'a region of the country,
political and tribal rivalries are a growing
motive behind violence, particularly in
Basrah, with limited anti-Coalition forces
attacks likely undertaken by rogue Shi'a
militia with Iranian support.
The Enemy
.. .
Violence aeainst the Iraai o e o ~ l eand Coali-
Don forces s committed generally by à wm-
binmiun of both Sunni and Shi'a groups, who
e uvew helmingls Iraqi but with a small y d
significant component of foreign suicide
operatives. Sunni groups include Rejection-
its-many of whom were members of, or
associated with, the former regimeÑan
terrorists groups, including al-Qaeda in Iraq,
Ansar al Sunnah (AS), and other smaller
groups. Shi'a groups include elements of
militias and illegal anned groups, many of
whom receive Iranian support. The threat
posed by Shi'a illegal armed groups, filling
perceived and actual security vacuums, is
growing and represents a significant challenge
for the Iraqi government. The appearance and
activity of death squads Is a growing aspect of
the violence in Iraq, with both Sunni and
Shi'a death squads adding to the violence by
targeting civilians and inciting reprisal. Al-
Qaeda in Iraq and elements of JAM
(nominally under the control o f Muqtada
al-Sadr) are among most prominent groups
engaging in a continuing pattern of attacks
and reprisals against individuals or com-
munities representing the other's sectarian
affiliation. Thus, the violence in Iraq cannot
be categorized as the result of a single
organized or unified opposition or insurgency;
the security situation is currently at its most
complex state since the initiation of Operation
Iraqi Freedom. Similarly, Iraqi or Coalition
security strategies must be tailored for the
different objectives, methods, and support
structures of each particular threat
Temrists and Foreign Fiehiers
AIQaeda in Iraq and its affiliates in the
Mujahadcen Shura Council consist of both
foreigners and Iraqis motivated by an
extremist Sunni Islamist ideology, which
rejects the West, attacks moderate Islam, and
seeks to establish an IslamicCaliphate in Iraq.
AS is another significant, mostly indigenous
terrorist group that objects to al-Qaeda in
Iraq's wanton targeting of Muslim Iraqis.
Foreign fighters continue to enter Iraq and
constitute (he majority of those conducting
suicide attacks. Sunni extremists continue
their efforts to force Coalition withdrawal,
perpetuate sectarian violence, and make Iraq
ngovemablc as a means of establishing the
Caliphate, The death of Abu Musab al-
Zarqawi has dealt a significant blow to al-
Qaeda in Iraq, though the cellular nature of its
robust network allowed decentralized opera-
tions to continue. Since then, al-Qaeda in Iraq
has fomented sectarian violence through high-
profile attacks against Shi'a civilians and is
engaged in a cycle of retaliatory violence
involving elements of JAM. Al-Qaeda in Iraq
recently announced that its "Utnar Brigade*'
that would begin targeting JAM in retaliation
for death squad activities in an effort to
portray al-Qacda in Iraq as a protector of the
Sunni. Additionally, al-Qacda in Iraq leader-
ship is increasing convergent with al.Qaeda
 senior leaders on goals and strategy following
Zarqawi's death. The recent statement from
Usama bin Laden on June 30,2006, in which
he addresses the Iraqi "jihadis," frames the
conflict in terms o f attacking those who
support the Govcnuncnt of Iraq. He also
warns Shi'a in "southern Iraq" that they are
not safe, ifthey continue to support Coalition
operations against Sunni urban centers in
Anbar Province. This is a clear attempt to
recast aliQaeda i n Iraq as the most effective
defender of Sunni interests.
Sunni Rejeetionists use violence and coercion
1 an anempi to force withdrawal of Coalition
forces, prevent Shi'a economic and tenitorial
dominance, and reverse Sunni political
marginalization by regaining a privileged or
protected status within a unified Iraq, The
1920s Revolutionary Brigade is the most
prominent of these Rejectionist groups. Sunni
Rejectionists continue to target Coalition
forces at rates higher than Sunni extremist or
Shi'a militia groups. The bulk of the Rcjec-
tionist insurgency w i l l likeiy continue to
attack Coalition forces while they remain i n
Iraq. Some elements are indicating an interest
in Prime Minister al-Maliki's new rewncilia-
tion effort, while still employing violence
against the Coalition forces and the ISF from
a sense of honor and as a means to force
meaningful political accommodation. Moder-
ates say they w i l l accept reconciliation
inducements and disarm only after death
squads ore eliminated; Shi'a militias are
disarmed, and key security, amnesty, and
political demands are met. Other hard-line
elements o f Rejectionist groups provide pro-
fessional military skills to al-Qaeda i n Iraq
and other extremists to achieve wmmon
tactical objectives. Other Rejectionists,
including some in Anbar and Baghdad, e
weary o f al-Qaeda in Iraq's violent intimida-
MY T H U S
tion tactics and actively oppose al-Qaeda in
Iraq, sometimes mounting their own anti-al-
Qaeda in Iraq attacks and raids.
Death squads are armed groups that conduct
extra-judicial killings. Death squads are
fanned from terrorists, militias, illegal armed
groups, and-in some case-rogue elements
of the ISF. Both Shi'a and Sunni death squads
arc active in Iraq, and arc responsible for the
most significant increases in sectarian vio-
lence. Death squads predominantly target
civilians, and the increase in death squad
activity isdirectly correlated with the increase
of civilian casualties. Coalition forces and the
ISF are actively largering elements that
participate in death squad activity.
Militias and Other-
Militias and small, illegally armed groups
operate openly and often with popular
support. This i s espaoially true i n areas where
the Government o f Iraq is perceived as unable
to provide effective social and security
services for the population. Miliias-whether
legal or illegal-provide an element of
protection for select portions o f the populace,
usually on an ethno-sectarian basis, resulting
in, overall, a more dangerous environment for
the Iraqi community. Some militias also act as
the security arm of organizations devoted 10
social relief and welfare. lending these armed
groups further . ~ i u m a c y Whether operating
/,thin or outside the la%. these armed groups
operate separatcl) from formal public safel>
structures. Their continued existence chai-
lenges the legitimacy of the constitutional
government and provides a conduit for
foreign interference. A n effective disanna-
men< demobilization, and reintegration pro-
gram is essential to meeting near- and long-
term security requirementsfor Iraq.
 Although a number of militias and ilkgal
armed groups have operated i n Iraq since
before the liberation, the groups that are
affecting the current security situation the
most arethe Badr Organization and JAM.
The Badr Organization is an authorized
militia under the Iraqi Transitional Adminis-
trative Law that predated the present Consti-
tution, and the organization actively partici-
pates i n the Iraqi government. The Badr
Organization has not engaged i n active via-
lencc against Coalition forces or the Govern-
mcnt o f Iraq; i t attacks Sunni targets and in
the past has also confronted JAM in an effort
to prevent its expansion o f power and
influence among the Shi'a. The Badr Organ-
ization receives financial and materiel support
6x1Iran, and individuals from Badr have
been implicated in death squads.
JAM is not a legal militia under Iraqi law.
However. it is well known and supported
popularly in Baghdad and the southern prov-
i n c e of Iraq, and has achieved a measure of
tolerance from elements of the Government of
Iraq. JAM is closely associated with the
Office of the Martyr Sadr and is nominally
responsive to his direction. Most, but not all,
JAM elements are following Sadr's order not
to encase Coalition forces or the 1SF excent
in self-defense. Still, violence between JAM.
the Iraqi Ann), and lo a lesser c x m Coalr
lion iorces, is frequent. Rogue JAM elements
are among the main perpetrators o f sectarian
violence, and J A M members frequently par-
ticipate in death squad activities. As described
above, JAM and Badr Organization members
have periodically attacked one another in the
past and are political rivals, but intra-Shi'a
conflict has taken a hack seat to the ongoing
battle of violence and revenge between al-
Qaeda in Iraq and elements o f JAM. Like
Badr, JAM receives logistical support from
Iran.
MY T H U S
The Peshmerga are, technically, not a militia,
but have the status of an authorized armed
force. The Peshmerga maintain security i n k -
pendently within and along the borders for the
Kurdish Regional Government, Some ele-
ments are integrated into the IPS. The
Peshmerga predominantly operate in Kurdish
regions, but have also been employed in the
private security company role outside o f
Kurdistan. The Peshmerga do not attack or
oppose Coalition forces or the ISF. I n some
cases, Peshmerga provide security for Coali-
t i reconstruction efforts. Over the long
term, however, the perceived dual allegiance
o f the Peshmeqa is potentially inconsistent
with effective national security and gover-
nance.
Unlike the Kurdish and Shi'a militia pups.
Sunni Arabs do not have formally organized
militias, but rely on neighborhood watches,
Rejectionists, and, increasingly, al-Qaeda in
Iraq. The presence o f Peshmerga, Badr
Organization, and J A M individuals in the IPS
and the National Police contributes to Summi
concerns about the potential for persecutuon
anJ partisan-imp. The rise of sectarian attacks
is driving some Sunrn and Sh 'a civilians in
Baghdadand the mixed-ethnic provinces to
support militias. Such support is likely to con-
ti: in areas where Iraqi institutions and
forces arc perceived as unable to provide
essential services or meet security require-
ments.
Without an apparent political motive, conven-
tional criminal elements are also capitalizing
on the instability in Iraq, although it is
increasingly difficult to distinguish among
activities conducted by criminal, insurgent,
and terrorist groups, as all are engaged in
kidnappings, extortion, assaults, and other
illegal behavior. I n some cases, criminal
 gangs work with terrorist organizations, with
the former abducting hostages and selling
them to the latter, which can use their captives
for publicity or to obtain ransom. The various
groups involved in illicit activity are doing so
to generate revenue, expand their influence,
and facilitate farther criminal, terrorist, or
insurgent operations.
Attack Trends and Violence
For this report, the term "attacks" refers to
specific incidents reported in the Muhi-
National Corps-Iraq (MNC-I) Significant
Activities database. It includes known attacks
on Coalition forces, the ISF. the civilian
population, and infrastructure.
In the government establishment period
beginning May 20,2006, the average number
of weekly attacks increased 15% compared to
the previous reporting period. Weekly attack
levels in July 2006 were the highest to date.
Coalition forces continued to attract the
majority (63%) of attacks However, the ISF
and civilians continued to suffer the majority
- - ---- -
A v e n g e Weekly Attacks b y Time Period
1 Apr 04-11 Aug 06
KY TIMES
of casualties. Overall, Iraqi casualties
increased by 51% compared to the previous
quarter. Most attacks targeting Coalition
forces were "stand-off' attacks, not involving
close-up confrontations between Coalition
forces and insurgents. Such attacks typically
consisted of improvised explosive devices
(IEDs), small arms fire, and indirect fire
weapons. The number of car bombs this
quarter increased to levels last seen in the
summer of 2005. Over the last quarter, car
bombs were largely centered on Baghdad,
Mosui, Kirkuk, and the Western Euphrates
valley, and primarily targeted civilians or ISF
checkpoints.
Although the overall number of attacks
increased in all categories, the proportion of
those attacks directed against civilians
increased substantially. Nationally, in April
2006, civilians were the target of 11% of
attacks; this increased to 15% in June 2006.
Baghdad showed a more pronounced shift in
the targeting of civilians compared to the
national trend. In Baghdad, civilian targets
comprised 15% of total attacks in April and
A w l s f . SOW
 Average Dally Casualties"- Iraqi (including ISF) and Coalltlm
1 A ~ r 0 4 - 1 1Aua 06

Total Attacks by Province

20 M a y 4 Aug 06

22% in June. The increase in attacks over the Four of Iraq's 18 provinces (Anbar, Baghdad,
past two quarters reflectsheightened sectarian Diyala, and Salah ad Din) continue to expert.
tension following the Golden Mosque bomb- a c e the majority of attacks. Anbar and
ing and increaseddeath squad activity. Baghdad are the worst affected provinces,
 accounting for 55% of all attacks. Further,
Ninewah and Tamim have seen significant
increasesi n attacks over the last quarter.
The average weekly number o f snacks on
critical infrastructure providing essential ser-
vices to the Iraqi people, such as electrical
power. water, and fuel, continued to decline
over the past quarter, decreasing from an
averme o f five oer week to an averace of two
per w e k . However. the effect o f these attacks
has been disproportionate to their numbers for
several reasons. Most notable among these is
the slow rate o f repair 10 damage from pre-
vious attacks. A t other times, Iraqi officials
may be slow in initiating repairs. Infrastnic-
lure remir is often hamnered
, . ..
bv insureent or
other c r ~ m ~ n atnt~m~dauon
l of maun1cnanw
workers Not all attacks and imimidanon are
the result o f insurgent or olher anti-govern-
ment activity, as described in the economic
section. Criminal activities, such as extortion
and black marketeering, aisn have outlets in
Infrastructure Attacks
Weekly Average* by T i m e Period
1Aor 04-11 AIM 06
NY TIMES
disrupting public essential services. Although
the number o f attacks is decreasing, the
essential services infrastructure w i l l continue
to be a high-value target for enemy elements.
Successful attacks on the infrastructure
adversely affec: the Ie~iomacyo f government
i n the minas o f the civil populat.on by
reducing the supply o f essential services.
Sustained ethno-sectarian violence is the
greatest threat to security and stability i n Iraq.
Breaking this cycle o f violence is the most
pressing immediate goal o f Coalition and
Iraqi operations. Conditions that could lead to
civil war exist in Iraq, specifically i n and
around Baghdad, and concern about civil war
within the Iraqi civilian population has
increased i n recent months. Notwithstanding
this concern, there i s no generally agreed
upon definition of civil war among academics
or defense analysts. Moreover, the conflict in
Iraq does not meet the stringent international
legal standards for civil war. However
defined, movement toward civil war can be
prevented. Tile U.S. and Iraqi governments
are continuing the military, diplomatic. and
political actions needed to prevent a civil war
and bring the situation in Baghdad under
control. Sectarian violence is largely confined
to the communal level. Furthermore, the Iraqi
institutions of the center are holding. Iraqi
leaders must take advantage of the popular
support for democracy, a unified Iraq, and
opposition to violence to form institutions that
take responsibility for Iraq's security.
Sectarian tensions increased over the past
quarter, demonstrated by the increasing
number of executions, kidnappings, attacks on
civilians, and internally displaced persons.
According to an estimate by the United
Nations. 22,977 families~137.862 individu-
alsÑhav been displaced in Iraq since the
February 22, 2006, Samarra Mosque bomb-
ing. Sectarian violence is concentrated on the
boundaries of mixed and ethnically dominated
areas of Baghdad and in southwestern Diyda
Prnvincc
According to MNC-I reporting, civilian
casualties increased by approximately 1,000
per month since the previous quarter. Execu-
tions in particular reached new highs in the
month of July. The Baghdad Coroner's Office
reported 1,600 bodies arrived in June and
more than 1.800 bodies in Julv. 9Wo of which
were assessed to be the result of executions
This is due in increased targeting of c i ~ l t x n s
by alQacda in Iraq and the increase in death
squad activity.
Sunni and Shi'a extremists, panicularly rogue
JAM elements and ai-Qaeda in Iraq, are, as
noted, interlocked in retaliatory violence and
! contesting control of ethnically mixed
areas to expand their areas of influence.
Throughout the past quarter, rogue JAM
members continued a campaign of overt
executions and mass kidnappings of Sunni
civilians. At the same time, Sunni extremists
continued to respond by carrying out large-
scale and mass-casualty bombings of Shi'a
gatherings and culturally significant sites.
Attacks on Shi'a by alQaeda in Iraq and
other Sunni elements are apparently designed
to inflame sectarian tension, which in turn
generates and results in retaliatory attacks on
Sunni civilians by rogue Shi'a elements
These rogue Shi'a actions increasingly appear
intent on securing Shi'a enclaves and
establishing control of contested areas of
Baghdad. Coalition forces and the 1SF are
responding by increased targeting of both
Sumi and Shi'a death squads.
 ~n y o u v r y f ~ ~ ~ ~ h ~ e e n e onoa k ~ntuq?
b r ~ out
that.e~~wrrnlght

Sectarian Incidents

2500, , em
 Public Perceptionsof Security
Ultimatelv. stabilitv and security , -in 1- ->
depend on the support of the Iraqi people In
general, Iraqis have had an optimistic outlook
on their future and the overall security situa.
tion. However, as time has passed, their
optimism has eroded. The aftermath of the
Golden Mosque bombing and the growing
sectarian violence continue to shape their
perceptions. As sectarian violence increases,
the view of the security situation worsens.
With the view that Baghdad is the key to Iraq,
a similar sentiment toward security exists
there.
An indication of support for the Government
of Iraq within the country is the level of con-
. . . . ..
fidence that the Iraai oeoole exoresslv dace
in tnc ISF Forces, especially when compared
aga.nst militias or other :llegal armed groups.
Since the previous report, confidence in the
Iraqi Army has remained generally constant,
with the notable exception of Baghdad, where
public confidence improved. Despite the
increase in violence, confidence in the Iraqi
Army rose from 69% to 78%. Despite the
recent violence in Basrah, polling data that
HY TIMES
include the Basrah area indicate increased
confidence in both the police and the Iraqi
Army over the last reporting period. Con-
fidence in militias is mixed, with a rise in
wnfidcncc in Baghdad countering an overall
downward confidence trend elsewhere.
The perceptions of the Iraqi population will
slowly respond to visible, effective actions
performed by the IPS.It will take continued
diligence on the part of the Iraqi Police to be
seen as actively patrolling their areas and
arresting individuals for criminal activity,
while paying particular care to avoid the
appearanceof sectarianism.
Another indicator is Iraqi use of the
intelligence hotline for providing t i p to
authorities about suspicious activity. The
population has continued to demonstrate its
willingness to report such activity and thereby
support the government's efforts against
terrorism. Since mid-March, the number of
tips has increased (see following chart). Con-
tinued timely and effective response of the
IPS to these tips should increase the con-
fidence of the population.
1 How concerned am you about an Increase In
sectarian or ethnic violence In Iraq?
 Security in Baghdad...
,m

m.

(0%

40%

m,

% Expmsing confidence In __ to improve the situation

In Iraq*
Total TIPS Actionable Calls
 2. Iraqi Security Forces Training and Performance
The ISF continue to grow in strength and
capability as indicatedby:
. progress in the training and equipping
o f lSF personnel;
assessed capabililies o f operational
units; and
progress in assuming responsibility for
security o f areas within Iraq.
Institutional capability within the MOD and
the M O I is an increasingly important indica-
tor of the transition to Iraqi security self-reli.
ance. As the MOD and the M O I continue to
staff, train, and equip forces, increased
emphasis is placed on the development o f
institutional capacity to direct, support, and
sustain the ISF.
NY TIMES
2.1 Progress in Training and Equipping
the Iraqi Security Forces
Force generation continues on schedule this
quarter. More than 14,000 additional Iraqi
soldiers and police have completed initial
training and equipping since May 2006,
bringing the total number o f ISF trained and
equipped to 277,600.
More than 92% o f authorized Iraqi Anny
battalions are assembled. Train-and-quip
efforts remain focused on building combat
support and combat service support forces
providing key enablers to Iraqi combat forces.
When fully established, these units will
provide critical combat enablers, such as
logistics and transportation support, intclli-
gencc, surveillance, and reconnaissance. More
than 65% of authorized personnel in the Iraqi
Army support forces have been trained and
equipped. Logistics units and overall logistics
capability continues to improve.
 MOD ForcW AnoÑ Capablmi~ ,

NY TIMES
 2.2 Progress i i Assuming Leadership ID
Counter-Insurgency
The ISF are increasingly taking the lead in
operations and assuming primary respon-
sibility for the security of their niltion, as Iraqi
army and police forces demonstrate an
increased capability to plan and execute
counter-insurgency operations. The following
charts depict this progress. As of August 7,
2006, 5 Iraqi A m y divisions, 25 brigades,
and 85 battalions, and 2 National Police
battalions assumed lead responsibility For
security in their areas of operation.
In total, there are 106 Iraqi Army combat
battalions and 8 Strateeic Infrastructure Bat-
talions (SIBS) conduct~ngoperations at v q -
ing levels of assessed capability Another
three combat battalions are in the process of
forming. In addition, 27 National Police bat-
talions are now operational and active. The
green shaded areas on the maps above depict
areas where Iraqi Army units have assumed
the lead for security responsibility. A unit can
1 I n o l Armv Lead and National Police Lead
HY TIMES
assume the lead once it has been thoroughly
assessed and has demonstrated that it is
capable of planning and executing combat
operations. Although these units lead security
operations, most still require support from
Coalition forces because their logistics, sus-
tainment, and command and control capabili-
ties are not fully developed. The Coalition's
primary force development objective to date
has been to produce trained, equipped, and
capable combat units; there has been less
emphasis placed on cnablcrs, including logis-
tics and command and control. Now that more
than two-thirds of the Iraqi Army combat
units are in the lead, the Coalition's focus will
shift more toward helping the Iraqis develop
these enablers. MNF-I will also continue to
help improve the capacity of the MOD to
organize, train, equip, sustain, and modernize
its forces, with the goal of eventually elimi-
nating the Iraqi Army's reliance on Coalition
support.
1
2.3 Ministry of Interior
The objective for the MOI, In partnership
with the Ministry of Interior Transition Tear
0401-IT), is to become a forward-looking
ministry that is effective, efficient, account-
able, representative, appropriately structured
to deal with the prevailing security conditions,
and staffed by people who are committed to
upholding the rule of law. The MOI farces
consist of lhc IPS, the National Police, the
border forces, and the Center for Dignitary
Prolcclion.
The MNF-I initiative to develop professional
civil security forces able to assume The lead
for the security of the Iraqi people has been
dubbed the "Year ofthe Police." The focus is
on creating a force loyal to the people of Iraq
and its Constinition, and committed to
guaranteeing human rights and the rule of
law. This was designated as one of MNC-1's
main efforts in 2006.
Mentoring of civil security forces is con-
ducted by Police Transition Teams (PTTs),
National Police Transition Teams (NPTTs),
Border Transition Teams (BTTs), and
Customs and Border Protection Teams
(CBPTs). More than 160 PTTs are assisting
The development of the IPS. Because of the
large number of police stations dispersed
throughout Iraq, the PTT program has initially
. .
focused on orovincial headauamrs. district
headquarters, and Iraqi police stations in key
strategic cities, but will spread to other sta-
tions throughout the country as more stations
achieve a higher level of readiness. To con-
duct their mission, the PTTs travel to their
assigned stations to train, teach, and coach the
Iraqi police and to conduct joint patrols with
their Iraqi counterparts.
The integration of International Police Liaison
Officers (IPLOs) into the PTTs significantly
increased the Coalition force's ability to
develop the IPS. The IPLOs provide the
civilian police with expertise in all technical
aspects of criminal investigation and police
station management. The deployment of five
additional Military Police comnanies in Jutv
2006 added extra'pTTs. enabling t'ic expan-
sion of the program to assess and assist in the
developmentof the IPS
Twenty-seven BTTs mentor and enable devel-
opment of border forces. Additionally,
Department of Homeland Security Customs
and Border Patrol Teams (CBPTs) provide
critical mentorship at ports of entry, while
38 National Police Transition Teams (NPTTs)
continue to support the development of the
National Police units. These transition teams
are intended to improve the readiness and
capability oftheir MOI partner units.
The Coalition Police Assistance Training
Team (CPATT) is on track to meet the goal of
recruiting and training the authorized number
of M01 forces by the a d of December 2006.
The force generation o f the Department of
Bowler Enforcement (DBE) and the IPS will
occur in November 2006 and December 2006.
respectively. Specialized police units, such as
the Criminal Investigative Division (CID) and
the National Information and Investigative
Agency (NIW.), will be trained by the end of
2006.
The IPS is composed of patrol, traffic, station,
and highway police assigned thmughout
Iraq's 18 provinces. Its mission is to enforce
the law, safeguard the public, and provide
i n m a l security at the local level.
CPATT has trained and equipped approxi-
mately 113,800 IPS personnel, an increase of
12,600 since the May 2006 report. CPATT
projects that it will have trained and equipped
135.000 IPS by December 2006. Although the
force will be manned in the aggregate by the
end of the year, proper distribution is a
challenge. Certain areas have a shortage of
trained officers while additional hiring in
other areas has resulted in an overage in the
force.
As of July 24, 2006, 71,324 police recruits
have received training in the 10-week basic
course. Police officers with prior experience
attend a 3-week course, the Transitional Inte-
gration Program (TIP), instead of attending
the full 10-week basic course. Originally
intended only for police trained during the
Saddam regime, theTIP was expanded in July
to include serving police officers who have
not been trained but who have served on the
force for at least one year. The TIP includes
training on human rights, crime defensive
tactics, democratic policing, first aid, patrol
procedures, firearms (9mm and AK-47), and
anti-terrorism. The Officer Transitional Inte-
gration Program (OTIP) course curriculum
includes democratic policing, human rights,
first aid police ethics. supervision and
leadership, use of force, firearms (9mm and
AK-47). communications and problem-
solving skills, anti-terrorism, patrol prom-
dures, critical for officers, and police investi-
gations. Some 41,051 police officers have
graduated from the TIP and OTIP programs.
IPS Operations
The IPS constitutes the majority of MOI
forces in the country. Each month, PiTs
assess the operational readiness of a portion
of the police forces, using the Transition
Readiness Assessments (TRA) process. The
TRA evaluates the police on the core func-
tions required for effective law enforcement
and community policing. Shortages of PiTs
has limited observation of the IPS in Anbar,
Babil, Basrah, Tamim, Wasit, Kaibala,
Maysan, Ninewah, Qadisiyah, Salah ad Din,
Irbil. Dahuk. and Sulamaniyah provinces.
45
However, the recent arrival of five additional
Military Police companies will greatly
increase the ability to assess the IPS.
More than 230,000 MOI employees have
been screened by the Iraqi Police Screening
Service, which checks fingerprints against
Ba'ath Party records and Saddam-era criminal
records. Of these, 5,300 were reported as
- .
oossible deroeatorv matches. and 74 have
been dismissed There is c u m t l > no screen-
ing process to ascertain militia allegiance
More than 54,000 police candidates have been
screened for literacy by Morris & McDaniel,
73% of whom passed and were allowed 10
enter basic training. Currently, no method
exists to track the success rates of these or
other police officers.
The IPS is equipped with AK-47s. PKC light
machine guns. Clock pistols, individual body
armor, high frequency radios, small and
medium pick-up trucks, and mid-sized SUVs.
The IPS in Baghdad and the nine other key
cities had been provided with 99% of their
authorized equipment at the end of June 2006.
They will have received 100% by mid-August
2006. The IPS in all 18 provinces have been
provided with 66% of their authorized equip
men1 and will receive 100% of their author-
ized equipment by the end of December 2006.
IPS Leadership
Leadership in the IPS is the cornerstone f a
success. The IPS currently has three leader-
ship courses to develop high-quality leaders.
The First Line Supervisor Course is designed
for company grade officers. The Intermediate-
Level Course is designed for field grade
officers, and the Senior-Level Course is
designed for General Officers. Each course is
Awn>%SUM
 two weeks long. Program topics are designed
for the target audience and include human
rights, discrimination, right to life, code of
onduct, democratic policing, modern polic-
ing, the role of the supervisor, communication
and the supervisor, delegation, change man-
agement ethics, police corruption, problem
employees, communrty policing, field training
police leadership, history of management,
modem supervision in today's law enforce-
1
-
ment oreanizations. crime scene m-cement.
disorder, records management, budget-
. decrease in public confidence in these forces
ing, logistics, equipment and facilities man-
agcment, group problem solving, mission
values, six-step problem-solving models,
overview of law enforcement planning, strat-
egic planning, motivational theory, and
analyzing employee performance problems. A
plan is in place to develop a more extensive
intermediate-Level Officers course, slated to
begin in the fall of 2006.
The Officer Education System has been
successful in developing junior leaders loyal
.
to the lraai. ~eoole.
. However. certain senio
leaders are product, ufthc former regime and
continue to view leadership as an entitlement,
not a responsibility. As these officers i
identified, they are removed.
Organized into a National Police Head-
quarters, two National Police Divisions, the
s t National Police Mechanized Brigade, and
the Emergency Response Unit (ERU), the
National Police are charged with maintaining
law and order while an effective community
police force is developed.
The National Police Headquarter*, provides
command and control, staffing, equipping,
training, and sustainmen1 hi these National
Police Forces. It also commands the two
training and professional development acad-
emies at Camp Solidarity and Camp Dublin.
NT TIMES
The 1st and 2nd National Police Divisions
reached 99% of equipping and authorized
manning by July 2006 and will continue to
progress through TRA levels, with the com-
pletion of force generation by December
2006.
Unprofessional and, at times, criminal
behavior has been attributed to certain units in
the National Police. This behavior and the
has been the impetus for a National Police
reform program. Each unit and its leaders will
be assessed by a joint (Coalition and Iraqi)
committee. Substandard leaders at all levels
will be removed and units will undergo re-
training.
National Police Traininv and Personnel
There are currently approximately 24,300
trained and equipped National Police, an
increase of approximately 1,600 since the last
report. They are trained in Iraqi law, human
rights, the rule of law, and democratic
policing techniques at the National Police
Academy.
New recruits undergo six intense weeks of
training at the academy in northern Baghdad.
Training includes weapons qualification,
urban patrolling techniques, unarmed combat
apprehension, use of force, human rights and
ethics in policing, introduction to Iraqi law,
vehicle checkpoints, and IED characteristics
and recognition.
National Police O~erations
All National Police battalions arc currently
conducting counter-insurgency operations,
with two battalions having security lead for
their areas of responsibility. NPTTs are
embedded at all levels of the National Police
units, down to the battalion level. All National
Police units work in Combined Operations
 Areas (COAs) and partner with Coalition
forces who provide support and advice.
The M01 recruits and vets the National Police
force. Coalition forces provide advisors for
the recruiting process, but neither actively
recruit nor provide lists of names of recruits
to the MOI. A National Police officer is
recruited and provided an academy start date,
upon arrival at the National Police academy,
the candidate is interviewed by a senior staff
officer (cither a Colonel or Brigadier
General). If he or she passes the interview, the
officer is admitted to the academy. The
individual's personnel file is then forwarded
to the MOI, where a vetting team reviews it.
If the officer is certified bv the vettine om-
cess. he or sne wil be retained and allowed lo
complete the academy If the candidate is dis-
appmed, me oficcr is immediately removed
from the academy
,v"tional Police Equipment
The National Police have received 92% of
their authorized equipment and will have
received 96% of their authorized equipment
by the end of November, missing its goal of
0 0 % by a small margin. They will have
received 100% of their authorized equipment
by the end of December. The police are
equipped with small m s , medium machine
guns, and RPGs, and they patrol in light
trucks. The mechanized battalions are
equipped with Annored Security Vehicles and
REVAs. a South African wheeled APC.
Department of Border Enforcement and
De~artmentofPorts o f Entrv
The DBE and the Department of Ports of
Entry (POE) are collectively charged with
controlling and protecting Iraq's borders.
MY TIMES
The DBE has 23,900 trained and equipped
personnel, an increase of 1,800 since the
previous report. The DBE isorganized into
5 regions, 12 brigades, and 38 battalions, and
includes the forces that staff258 border fons.
Three academies, each with a capacity of
approximately 800, train border patrol forces.
The Iraqi Border Patrol Basic Training
Course focuses on an introduction to law
enforcement, human relations, human rights,
weapons qualification, combat life saving,
vehicle searches, Iraqi border law, arrest and
detainee procedures, and small unit patrolling.
DEE and POE Onerations
The DBE is supported by 27 Coalition Border
Transition Teams (BTTs). The 11-man BTTs
mentor and support the development of the
border units. The BTT members are trained in
various specialties, including logistics and
mmnication'i. and orovide critical assis-
tance to the oordcr force commanders in the
areas of personnel management, intelligence.
operations, budgeting, equipment account-
ability. and maintenance. Additional BTTs
deployed in early June to support the
development of the POE at critical high-threat
border crossings. In February 2006, MNF-1
supported the accelerated development of the
POE through the deployment of a combined
Border Support Team (BST), consisting of
customs border protection agents and BTTs.
In March 2006, most DBE units reached TRA
Level 3, but remained short of equipment and
key personnel. The DBE and POE are a
higher priority for allocation of critical
equipment; and cross-leveling of personnel
has occurred to raise units to TRA Level 2.
By November 2006, the DBE and POE are
expected to have 28,360 trained and equipped
personnel.
 There arc 14 land POEs. of which 13 are
functional. Efforts continue to improve POE
security. Progress in designation of POE
standard organizations, delineation of respon-
sibilities, and development of detailed
policies and procedures has continued. The
U.S. Department of Homeland Security, in
coordination with Multi-National Security
Transition Command-Iraq (MNSTC-I), has
continued its rotation of Customs and Border
Patrol Teams. These border security experts
have had an important impact on the POEs,
particularly along the Syrian border. The
increased emphasis on BTTs and the Customs
and Border Patrol Teams has improved DBE
readiness levels, as the Coalition's expertise
and mentorship affects the Iraqi border forces.
Organizational equipment includes small and
medium pick-up trucks, mid-size SUVs,
generators, and radios. Personal equipment,
including AK-47s, medium machine p n s ,
and individual body armor, complete the
outfitting of the border forces. The DBE
currently has received 81% of its authorized
equipment. They will have received 97% of
their authorized equipment by the end of
August, just short of the 100% goal for that
date. They will reach the 100% goal one
month later. Iraai POEs will have received
100% of their' equipment by the end
December 2006.
Center/or Dianitarv Protection
Training and equipping of the Center of
Dignitary Protection (CDP)is complete. The
force of approximately 600 people has been
prepared to serve as the Protective Security
Details (PSDs) for Iraq's new government
leaders. It is unknown how many of these
personnel remain employed by MOI. An Iraqi
training team assumed responsibility for
training future PSD personnel in June 2006.
NY TIMES
In addition to the regular MOI forces, there
are an estimated 145,000 Facility Protection
Service (FPS) personnel who work directly
for each of the 27 ministries. These forces act
as security guards at government buildings
and allow the IPS to police the communities,
They are minimally trained and equipped,
generally without Coalition oversight, and
lack centralized control. FPS personnel have
not always proven reliable, and some have
been responsible for violent crimes and other
illegal activity. Unfortunately, the FPS
uniform looks similar to the police uniform,
which causes many Iraqis to confuse the FPS
with the better-trained IPS, undermining the
reputation and credibility of the IPS. The
Coalition and the Government of Iraq arc
establishing a program of reform to better
regulate the FPS.
The MOI overall TRA remains al
TRA 3-Pml) Effective. The MOI Transition
Team is wonting daily in the MOI, stressing
planning and programming resources. The
new Minister of Interior, Jawa al-Bulani, is
embracing the need to reform the ministry.
Logistics is the only essential system still
assessed as ineffective. Im~rovementof the
logistics system is a focal point for the next
90 davs All oiner major funct.onal areas and
systems are considered partly effective. Over
the next 90 days, emphasis will also be placed
on building a solid framework of plans,
policies, and processes to ensure that the MOI
" .
can manace personnel efficiently. conduct
policing operations effectively, and maintain
and sustain capability.
Logistics capabilities continue to be an area of
significant concern for the IPS. particularly
 with respect to vehicle maintenance, How-
ever, accountability of equipment continues to
improve as verified by reports submitted by
PTTs.CPATTMOI-TT continues to provide
logistical support in both an advisory and
financial capacity to assist with sustainmat
operations. Recently, a Director General for
Logistics and staff were put in place. A
6-month vehicle maintenance contract for the
National Police and the Baghdad IPS was
agreed upon. Currently, there is a
US$950,000 vehicle spare parts contract for
MOI forces, and a US$350,000 vehicle spare
pans contract for the National Police is in
place. The average monthly logistical life
support provided from April through June
was USI20.266.121, for a total of
USS60,798,363 during that timeframe. Con-
stmction of a MOI National Storage and
Maintenance Facility was started in June
2006, with an estimated completion in
December 2006. Currently, we are in the
process of conducting a test case to hand over
an LDI storage warehouse (one of seven) to
MY TIKES
Iraqi control in August 2006. A plan is being
formulated to hold a National Logistics
Conference in September 2006.
MOI security forces are on track to reach
December 2006 Objective Civil Security
Force equipping goals. The following graph
depicts the equipping status and key shortfalls
of Baghdad and the 9 other key cities,
18 provinces, the National Police, the DEE,
and the FQEs. Equipment-issue priorities
focused on quipping Baghdad, the 9 key
i t and the National Police, while
simultaneously building initial functionality
1 the provinces, borders, and ports of entry.
In general, these goals were met. However,
the MOI doe not currently have an effective
quipment management system in place. As a
result, it is unknown what percentage of the
equipment issued to the MOI is still service
able.
1468
 Number to bÃTnlmd h 2MB
11Ot^KirnCIvUSecurityFore*mIfidof10M
The equipping effort did experience
unforeseen delays.
. Large shipments of Russian weapons
were delayed clearing customs while
exiting Russia and entering Iraq.
Clock pistol delivery delays occurred
when a U.S. manufacturer challenged
the award of the pistol contract to a
non-US. company.
Communications gear was delayed due
to shipping problems.
All matters have now been resolved and items
have either arrived or arc inbound. All equip-
ment fielding goals arc on track to be met by
December 2006.
The MOI does not currently have an effective
personnel manaeement
- system.
, As a result. it
is unknown how many of the forces trained
h> CPATT are still employed b) the M01, or
what percentage ofthe 1'16,000 police thought
to be on the MOI payroll are CPATT trained
and equipped. CPATT estimates attrition to
be at least 20% per year going forward. The
MOI reports paying death benefits for more
than 6,000 police officers since the fall of the
Ba'athist regime in May 2003.
In addition to the overall number of police in
Iraq, there are some issues with distribution of
the police among the various provinces. For
example, by the end of the year, Diyala
Province will have recruited its authorized
force, but will not have trained the entire
authorized number. In the case of Diyala, the
provincial leadership has resisted sending
100% of the force to training due to security
concerns and the reluctance to take its police
off the streets. Anbar, Basrah, and Ninewah
may also miss their training targets for the
same reason. Rather than let training seats go
unfilled, other provinces were permitted to
e n d some of their untrained personnel to
training. As a result, those provinces will have
more than the authorized force trained in their
provinces.
As with the IPS, the National Police p a p 1 1 is m l a t i v c National Police. Recruiting inilia-
significantly larger than its a u t h o r i d end- t i w s targetin& Sunnis have impmved the
strength. There are currently more than divmily. Unlike the National Police, local
29,000 Nationai Police on the MOT p y ~ o l l , police force3 tend to be o f the m e ethnic
but it is u n b o w n how many o f these have mix w the mmmunities in which they live
been trained and equipped. Absenteeism and work.
among National Police units gmeally follows
the same pancrn as i n the military. Leave
plicies and immature personnel management
plicies accomt for 30%40% of personnel I n 2005, he M O I 1 0 conducted 7W c o m p
not present for duty. Absenteeism i n the IPS tior+related inv&igations. O f these, 4R
is dificult to quanti* hecause shifl schedules (64%) were closed. O f the 472 closed
preclude m s from asccnaining which police invesligations, 1I 8 (25%) were fonvarded to
oficcrs are absent and which are simply off- the CPI or to a coun for adjudic*tion, 350
duty. (74%) were closed because of "insuficimt
evideixe," and 4 (1%) were handled as
The DUE payroli is also larger than ils internal M O I discipline. To improve the IG's
authorized end-stren&, with 25,832 DUE capabi1il-j to investigate, the Specialized
pxsonnel on the M O I payroll. I t is c m t l y A d v a m Training Unit at lhe Baghdad Police
mknom how many untrained DUE p m o n ~ ~ e l College w i l l train new M O I investigators. I t
are on the rolls and how man" o f the mined will take awroximatcly I 8 months to train the
investigations Directorate at the basic investi-
gator level. Beyond the I G mining, improve-
effective personnel management system w i l l ments in leadership oversight, accountability,
help resolve these rcporling and wwunt- w d ~eductimsi n gecurian and militia influ-
ability deficiencies. ence a= required before Iraqis become con-
fident that MO1 forms can ensure security and
uphold the m l c o f law in Iraq.

The U.S. Government is comvincd to helping

the Government o r Iraq c m t e an M O I that
ccflects thc divemly o f the Iraq, people The
goal is to c m t e ethnically inte&ted.units at
the national level, w h i k still allowing 10-1
police to reflect the ethnic compmition o f the
communitim in which they serve. The former
Police Command% now p w l o f thc National
Police, we kcorning increasingly divem.
The f m m Public Ordm Uattalions, also now
pml of the National Police, tend to be dispro-
prtionately Shi'a, due to a lack of Smnt par-
ticipation when these units were being f m e d
in preparation for the J a w 2005 elections,
Merging the National Police Commandos and
the Public Order U&mIions into one National
Police fmce has hel-d produce a more q m -
Corruption, illegal activity, and sectarian bias
have conslrained progress in developing M O I
foms. Inappropriate tolerance o f and infilm-
lion by Shi'a militias, some o f which arc
influenced by Iran, is the primary wncem o f
tho Govcmmmt o f Iraq. A iaok o f effective
leadership and policies to stem cornpiion
thrmgh accountability for aclions, equipment
and p c r m n c l have enabled the thee o f pay
and equipment, unlawful dumtions, and
r e p o d cases of atduction and torture w
mecution of Sumis. The ministor is corn-
mimed to changing c o m p t l e a d m a d insli-
Nting p o l i c i s to eliminate comnpthn.
An additioml 45 m s i t i o n teams were
deploy& in July to increase PTT wverage
across the m n t r y , As stations begin m reach
T M Level 2 in August. transition terns will
expand their coverage o f nearly 1.000 tola1
?.!ations across Iraq. This will limit infilmtion
by militias, improve adherence to the rule o f
law, and prevent cornpiicily and pafiicipation
in secmian violencc.
logistics and support fcx each division, with
Taji National L k p t providing depot-level
maintenance and resupply. Each battalion,
b&zade. and division hea&umers will be
&pofied by a ~eadqum&s and k w x e
Company (HSC) prov~d~ng log~sttcai and

2.4 Mmlstry o f Defense

lk.Iraqi MOD f o m s consis o f Army

(iwluding Special Operations Farces), Air
Force, and Navy (inciudiig M h m )
personnel. TIE end slate of the Objective
Counter-lnsmgency Force will be an approxi- The Iraqi A m y includes approxhately
mately 137,500-person force based mwnd an 115.000 trained and equip@ wtnbat w i d i m
A m y with 9 infant?y divisions and i mecha-
(including SIB personnel and around 9.6CQ
nized infantry division consisting of 36 b"-
support forces). The cnpability of Iraqi A m y
gades and 112 bamlions. Niic Motorized
Transpanation Regiments, 5 lagistics bat- mils continuts to improve, faaililald by the
tai~ons, 2 support battalions 5 Regionai mento"ng by embdded advisors at the
Support Units (RSUs), and 91 Garrison banalion, br~gade,and division levels, and
Support Units (GSUs) are intended Io provide parmership with Ccalition force units.

1 lraai Annv Battallona I n Combat

 Combat Operations
<comm"yIw.1 and .bmq
Force generation of Iraqi A m y mits is
increasingly focused on wmbat enablers and
continues in accordance with the force
development plan, All thm planned Iraqi
Training Battalions are famed and hlly
operational, These banalions allow the Iraqis
to train soldiers independently in suficient
quantities for f o r e generation completioz~and
replacement needs. New recmits attend a
13-week program of insuuetion. Upon gradu-
ation. soldiers receive additional minine
specific to thar mil~taryoccupatton. Dcpmd-
ing on their m~limryoccupal~onaiskill assign-
ment, the length of mining ranges from three
to w e n weeks. Other tra~ning initiatives,
such 8s the Military Intelligence Schml, the
Signal Schcal, the Bomb Disposal School, the
Combat Arms Branch Schml, the Engineer
Schwl, and the Milimy Poliie Schwl,
contribute to the growing pofessionalism of
the Iraqi A m y through teaching diverse spe-
cialties necesuy to conduct and snsain
counter-insurpxy operations
Thm of the nine planned Motorized Trans
prtation Regiments (MTR$ are amroaching
full operatima1 capabilii, While a shorlfall
of hlly competent maintenance personnel
adversely fleets full capability, these hlTRs
provide improved mobility and w$tainmnI
s u p r l for Iraqi forces. Progress has been
made in eaablishing HSC units for each
mmbm battalion, b"gade, and division to p r ~ -
vide msporlation, commu~~ications, medicat
suppiy. and maintenance supporl. Approxi-
mately 80% of the planned HSCs have been
famed; onethird arc operational, and the
remaining planned HSCs me scheduled fm
mmpletim by December 2006.
Currently, I7 SIBS are being trained and
equipped, Although the Iraqi A m y maintains
~ m a t i o n a lcontrol of the SIBS, at present
mly 1 SIB Is capable of planning and execut-
ing independent operations, and all I7 q u i m
Coalition logistical support. Training of these
battalions continues to employ a "train-the
trainer" model that fmum specifically on
squadrm- and platoon-level asks.
T k capabiliv of the SIBS is s o w i n s as tbey
receive training and more modern equipment,
MNC-1 is prtnering the more apablc Sms
with I x a l l y deployed lraqi A m y un.& to
provide them with counter-insurgencyexperi-
en= and to awelerate their leadem' profs-
siomai development. Evaluation of their effec-
tivmess i n securing i n f r m c t u ~particu-
larly oil pipelines i n norihcm Iraq, is ongoing.
The Iraqi Armed Service and Supply Instime
(IASSI) at Taji plays a critical mlc i n training
lhe oficers and nm-commissioned o f f ~ e r s
(NCOs) to fill support and wmbat service
support psitions i n tbe lraqi A m y . The
IASSI has trained more than 5,000 oficers
and NCOs who serve as leadm i n the MTRs,
RSUs, and HSCs. The IASSI wntinues to
support the development o f critical lraqi
A m y support and combat support capabili-
ties.
The Iraqi S p i a l Operations F o r m (ISOF)
are c o m ~ e of
d approximately 1,600 s o l d i m
organized into the Iraqi Counter-Terrorism
Task Force, the lraqi Commandos, a support
banalion, and a spccial rewmaismnce unit.
The lraqi Navy is tasked with defending
Iraq's coast, tmitorial waters, vital ports, and
offshore oil platforms. The Iraqi Navy has
mort than 1,100 trained and equipped sailors
and marines organized into an operatbnal
headquarten, two afloat squadcons, and five
Marine companies. The Iraqi N a v is devel-
w i n g independent capabilities for surface
surveillance, maritime interdiction, oil ter-
minal protection, and s u p p r l operations,
The Iraqi Navy Training kpariment
wntinues to develop unit-level refresher
training and naval skills improvmmts,
i n c l u d i n ~bsic seamanship and maritime
xcuriiy oprations. In June 2W6, the Train-
ing Department indepmdently wnducted
basic training and successfully graduated 324
naval recruit% Its trainin5 efforis range from
mentorship, as mdmcted by the Naval
Transition Team, to active skills trainin& as
wnducled by Coalition Navy, Marine, and
Coast Guard F o r ~ s .
The Iraqi Air F o m wntinws to evolve
toward supporting the counter-insurgency
force, bui pmgress has been slowed by
dificuliy i n recruiting qualified applicants.
There am c-ntly 750 prsonnel in the lraqi
A i r Force, with development plans caliing for
a concentrate3 recruitment effort over the
nexl I 8 months to at least d w b k the per-
m n e l by the end of December 2007. This
cfforl is intended to provide a satisfictory
wrps o f professionals as a foundation for
future growih.
The Intelligence Surveillance and Recannais-
m c e aircraR at Kirkuk A i r Base (7th Squad.
mn with five C m p A i r 7SLs) and B d Aii
B w e (70th Squadron with two Seekers and
six CH-2000s) me performing o p r a t h a l
missims These aircrafl am p h a r i l y
deployed to patrol o i l pipeline infrastructure
i n the noah and south, with occasional
misicas conducted i n support o f 1mqi A m y
units. There have k n recent airwotihines
issues with the CompAir 7SL aircratl and the
Coalition is working with the Iraqi Air Force
to develop solution$ and alternatives to
continue sumorling the missiom.
Helicopter operations h m Taji A i r EIaw i n
central Iraq are still in their i n h y , but the
next six months should see a marked
improvement. The 2nd Squadron is e-ted
to receive the first 6 of I6 Huey 11s fnm a
modification f a c t q in the United State by
the end of January 2GQ7 and the remainder
before April 2007. The 2nd Squadron will
m e C-l3OEs fmm 23cd Squadxm a New
Muthma Air Base mund out the Iraqi Air
F m e floel. Early complications wilh low
mission capable rates have been solved, and
fleet-wide readiness was measured at 72% in
July 2006. The Iraqi Air Force has qwtd
an addktioml three aircraR from the US,
Government to bring the fleet tom1 to six.
These additional aircraft reflect the Cdition
Air Force Transition Team's force generation
plan and efforts are under way to identify
additional funding to meet this request,
Embedded Transition T m s cnntinue to pm-
vi& monthly TRAs measuring the smfling,
wmmand and control, mining, sustainmenW
logistics, equippin& a d leadership of their
panncred Iraqi units.
The total number of MOD miliiry personml
mined and equipped is currently more than
ll5,CnX1, approximately 84% of lhe objective
end-strength.
With lhe gemration of Iraqi A m y b d i m s
more than 92% complete, the focus of the
Irqi Amy's mi"-andquip effort shiRed
durmg this reporting perid toward building
combat q r l and combat service support
forces More than 65% of authorized per-
m n e l in the Iraqi Amy's suppnt f o m s arc
trained and equipped.
Equipping the Iraqi Amed Forces continues
as planmd since the May 2006 r e p * wilh
92% of authorized equipment iswed to the
10 lmqi Amy Divisions and subordinate
formations. MNSTC-I is on track to issue ell
cwrcntiy aulhorized equipment by the end of
kcember 2006.Equipment is dimibuted and
filled -ding lo the commander's opera-
tional assessment: MNSTC-I is currently
working wilh the MOD to transition main-
tenance capabilities to the Iraqi Amy, To
date, two Regional Supprt Units facilities
have lxen trmsitioned to the Iraqi Amy.
The lack of junior ofiicers and NCOs
mtinues to tx one of the big@ factors
impeding devebpment of MOD forces. Them
is a shms of school-mined oflicers and
NCOs to !ill lower-level slaff and lademhip
msitions. The s h o a ~ of
e leaders will a h ~ t e
as oficer remits am unnmissioned and they
join their units. For NCOs, qualified soldiers
arc being ''grown h m within'' through devel-
opment md schmling to achieve prmotion
to NCO leadership positions.
The Regional Training Cenlers (RTCs) and
the NCO Academy focus m junior lcadm
&velopment that is critical to building a
pfcssiond force. T k RTCs conduct Squad
k a d e r and Plamn S e r ~ mCourses,
t Newly
formed Semeane Maior and Chief W m n t
Ofticer couises have k n added to the NCO
F'rofcsimal Education Systcm. Specialized
la&rship c a u r ~ s ,such as Logistics Super-
visor, are being cnnducted at the Iraqi Amy
Service and Support Institute at Taji. Three
Iraqi Military A d e m i e s at W k o ,
Qalachwaian, a d Ar Rustimiyah continue to
mi" fume oficers.
The institutional leadership courses are com-
plemented and reinforced through partnership
with Coalition Military Transition Teams.
These teams, embedded with every Iraqi
battalion, brigade, and division, provide daily
guidance and mentorship. In addition, Iraqi
units arc partnered with Coalition force units.
These partnerships, combined with the
expertise and leadership taught through (he
institutional base, are critical for development
of both unit proficiency and leadership essen-
tial to increased operational effectiveness.
The importance of ethics, human rights, and
leadership in the Iraqi Anned Forces has
engendered a concept for a Center for Ethics
and Leadership to provide institutional over-
sight for ethics education, training, and
assessment.
A promising trend is that military leadership
has become more involved with civic leaders
and sheiks in their areas of operation. This
activity will continue to reinforce and
establish the importance of Iraqis leading and
Force GenerationTheline
Manning ¥nTrelnim
taking responsibility for their own security
and interests.
The new Minister of Defense, Abd al-Qadr
Muhammad Jassim aI-Mufiaji, is confronting
the challenges he faces and is already making
his mark. Previous logjams in acquisitions
and contracting are being eased, and he is
working closely with MNSTC-I to proceed on
force development, force expansion, and
logistics support. The MOD Transition Team
grew to meet this accelerated pace of business
and expanded to more than 50, half of whom
are Military Professional Resources Incor-
porated contractors. Close and effective
relationships are being forged by team
members with all senior MOD headquarters
officials, and the confidence, and thus
capacity, of these officials is strengthening.
TTbe ministries and the Joint Headquarters are
expected to be in the lead with Coalition
support by (he end of 2007. However, a
partnership with these institutions will be
 required through at least the first peaceful
transfer of power in 2010.
MNC-Icontinues to -vide locistical
"
to the Iraqi Armed Forces where the cslab.
..
smrt
lishcd qstem falls short. Although there has
been some success with Iraqi Army units
using their own processes, there is still agreat
deal of institutional development remaining.
MNF-I is working with both MNC-1 aixi
MNSTC-I to aid the Government of Iraq in
developing a defense logistics system. but in
the absence of a self-reliant system, MNF-I
must provide extensive support to Iraqi
forces.
MNSTC-I processed life support contracts in
a total amount of approximately USI7.8 mil-
lion for the months of May and June 2006.
Currently, all life support contracts have been
lransitioned to the MOD. MNSTC-I has
formed a Transition Working Group tasked
MY TIMES
with ensuring that the MOD properly supports
all Iraqi Army life support requirements.
DOD requested USSI51 million for MOI
sustainment in the FY2007 Budget Amend-
ment request, but did not ask for funding for
MOD sustainment.
Coalition forces are also supporting the
Government of Iraq with fuel. In June 2006,
all Iraqi Army units submitted requisitions for
fuel; MTRs provide the majority of the fuel
distribution. Storage capacity will not be fully
fielded until December. Additionally, the
GSUs will not be fully on-line until March
2007. Until the MTRs and GSUs are in place,
the Iraqi Army units will not be fully seif-
ufficicnt in terms of bulk fuel transportation
and storage.
Coalition forces supported the Iraqi Army
units with the combined fuel report listed
below.

I n the Iraqi Army, approximately 15%
anrition is the norm for initial training. When
a unit is fully trained and employed in combat
operations, some soldiers find that they do not
like the particular location or they cannot
cope with dangers o f the counter-insurgency.
Absent-without-leaverates are typically about
1%-4% for most Iraqi Army divisions,
although deployments to combat sometimes
cause absentee spikes of 5%-8%. However,
soldiers in units in this final stage o f develop-
ment arc less likely toabandon the service. As
with any organization, the units with strong,
competent leaders tend to have higher
present-forduty rates than those with weak
leaders. However, t h a i is currently no judi-
cial punishment system within the Iraqi
Army. Therefore, Iraqi Army commanders
have little legal leverage to compel their
soldier's to combat, and soldiers and police
can quit with impunity.
The U.S.Government is committed to weal-
i n m Iraai military that reflects the ethnic
and religious fabric o f Iraq, with diverseunits
loyal to the nation and not sectarian interests.
Although competence and merit are the
decidine factors when selectitto recruits.
particularly leaders, the ISF are developing so
that they generally mirror the demographic
make-up o f Iraq. Sectarian lines remain
drawn, however, along geographic lines, with
Sunm, Shi'a, or Kurdish soldiers mostly
serving in units located in geographic areas
familiar to their group. These divisions are
even stronger at the battalion level, where
battalion commanders o f one particular group
tend to command only soldiers o f their own
sectarian or regional backgrounds. The
-
Minister of Defense.. thmuuh an Officer
Selection Committee, has used the normal
-~~
transitions to continue to diversify the senior
leadership in the Iraqi Army. This continuing
process itrives to ensure that the Iraqi ~ r m y
is led by competent leaders who are repre-
sentative of the national fabric. I n the
aggregate, Sunni, Kurd, and Shi'a are well
and appropriately represented in senior
leadership positions. The Sunni and Kurds are
slightly over-represented, while the Shi'a are
slightly under-represented, though Shi'a
commanders still hold a large majority of
. -
command nosilions. The oercentaee o f Sunni
leaders at each level remains constant At the
battalion level, the echelon in which the Shi'a
have the highest percentage o f commands,
they are appropriately representedwhen com-
pared to the demographics of the Iraqi
population. The relatively high percentage of
Sunni and Kurds in higher-level commands is
a result o f the requirement for experienced
military leaders, o f which few were Shi'a.
Generally, Shi'a and Kurds were excluded
from higher-level positions in the former
regime. The Kurds, however, benefited from
years of experience in the Peshme~a.
Nationally recruited Iraqi Army divisions are
otherwise representative o f the ethno-
religious composition o f the country. The
even-numbered divisions were originally
formed as National Guard units, with the
intent that these units would serve in the
respective local regions. The composition of
these units tends to be representative of the
mgion in which they serve. Over time,
replacementsfrom the national recruiting pool
will increasethe diversity o f these divisions.
 -
3. Transition
3.1 Traiiiitioiing Security R~ponsibility
Process for Imolemenfine Provincial Iraqi
The transfer of security responsibility from
Coalition forces to the Government of Iraq is
an obiective of the security track outlined in
the National Strateev for Victory in Iraq.
Such transfers reflect the capability of the
Government of Iraq to fulfill its sovereign
responsibility in the most fundamental, vital
interest of any stateÑt protect its citizens
and safeguard its territory. As Iraqis lake on
more responsibility for security, Coalition
forces will increasingly move to supporting
roles in most areas. This may allow for future
personnel reductions or a delay in previously
scheduled deployments. The Coalition's
military posture on the ground will remain
responsive and flexible. As the security situa-
tion evolves, MNF-I will maintain sufficient
forces on the ground to help Iraq consolidate
and secure its gains on many different fronts.
The recent agreement between Prime Minister
al-Maiiki and President Bush to increase force
presence in Baghdad is indicative of this
flexibility.
Iraq achieved a historic milestone on July 13,
2006, with the transfer of security respon-
sibility in Muthanna Province from MNF-I to
the Provincial Governor and civilian-con-
trolled Iraqi Police Service. Muthanna is the
first of Iraq's 18 provinces to be designated
for transition to Provincial Iraqi Control,
which represents the successful development
of Iraq's capability to govern and protect
itself as a sovereign and democratic nation.
The joint decision between the Government
of Iraq and MNF-I to hand over security
responsibility is the result of Muhama's
demonstrated ability to take the lead in man-
59
MY TIMES
aging its own security and governance duties
at the provincial level. The transition decision
also reflects a joint assessment of the overall
threat situation in Muthanna, the capabilities
of the IPS and the Iraqi Army, and the provin-
cial leadership's ability to coordinate security.
Transition Teams are in place to smooth the
transfer process, and multinational forces
stand ready to provide assistance if needed.
Dhi Qar Province appears to be ready to
assume security independence within the next
45 days, and several other provinces should
meet the transition criteria before the end of
the year. The Government of Iraq and the
MNF-1 will continue to transfer security
responsibilities in other provinces as prercqui-
site conditions are met.
In concept, security transition is a four-phased
process.
I. Im~lemeatPartDenhin. MNF-I and
its Major Subordinate Commands estab
lish and maintain partnerships across
the entire spectrum of ISF units, from
battalion to ministerial level.
2. Iraqi Army Lead flAL). Process
during which Iraqi Army units progress
through stages of capability from unit
formation to the ability to conduct
t e r - i n s u r g e n c y operations,
3. Provincial Irani Control (PIC). Iraqi
civil authorities satisfy the conditions
required to assume control and to
exercise responsibility for the security
of their respective provinces.
4. Irani S w r i t v Self-Relimncc. Tilt
Government of Iraq achieves PIC (or a
combination of PIC and IAL) through-
out Iraq, and the government, through
its security ministries, is capable of
planning, conducting, and sustaining
security operations and forces.
Amuif. low
These phases arc not strictly sequential. For
example, the Iraqi Army docs not have to
assume the lead in aprovince before Coalition
forces may begin transfer of provincial
control. This was thecase in Mulhanna.
Phase 1 of the security transition wncept-
implementing partnerships-is already
complete. As described above, the second
phase, Iraqi Army lead, is well under way in
many provinces. The third phase, establishing
provincial Iraqi control over security, will be
implemented on an area-by-area basis. The
Government of Iraq, jointly with military and
political leadership of the Untied Slates and
Coalition partners in Iraq, will assess when
conditions permit handing over security
responsibility for specific areas from Coali-
tion forces to the Iraqi civil authorities. The
Joint Committee lo Transfer Security Respon-
sibility (JCTSR) has developed criteria to
guide the transfer of security responsibility.
Recommendations for rtransfer include an
assessment of conditions in four categories:
i Threat Assessment
2. ISF Readiness
3. Local Governance Capability
Provincial Security Transition Assessment {PSTA)
Aa of July 2006
4. MNE-I Ability to Respond Quickly to
Major Threats, if Needed
The recommendation to transfer security
responsibility is based on the specific situa-
tion in any one province or provincial capital
in the context of the overall security environ-
ment. The appropriate Multi-National Force
Division Commander and Provincial Gover-
nor, assisted by representatives of the iraqi
Ministries of Interior and Defense and U.S.
and United Kingdom Embassies, conduct
monthly assessments of provinces and of
provincial capitals. The JCTSR working
group meets monthly to review the assess-
ments and to present recommendations to the
JCTSR principals regarding which provinces
are ready to be transferred. Once a decision is
made, the JCTSR working group will provide
oversight of the development of transition
directives, develop a public affairs plan, and
arrange a post-transfer security agreement
between MNF-I forces and provincial
governors. Every transfer will ensure an
effective and successful handover of security
responsibilities. Moreover, the transition and
reduced nresence of MNF-I forces will be
plainly visible to the Iraqi people

Releases
In June 2006. MNF-I. in coordination with the
Government of Iraq, conducted a large-scale
release of detainees in support of the newly
formed national unity government The
release served as a visible symbol of the gov-
ernment's commitment to national unity and
reconciliation in the progress toward demo-
cratic governance and the rule of law. MNF-I
released 2,500 low-risk detainees over a
oeriod of three weeks. Couoled with the 500
detainees from the normal Combined Review
and Release Board process. UNh-1 had a nei
reduction of more than 2.000 detainees in
June. A MNF-I special board reviewed
approximately 6,500 records to identify the
low-risk detainees. Each file was also
reviewed by the MNF-1 Deputy Chiefof Staff
for Intelligence to consider any additional
intelligence reports. Detainees involved in
vlolcnl acts, 1ED makinglplacement, financ-
ing insurgent operations, identified as key
insurgent leaders, or who have been recap-
hired were not considered for release.
Detalnee Population 2003 through 2006
MY TIMES
-en!ton Foc~lum
&I oes 10 the Government oflraa
MNF-I has begun training Iraqi guards for a
potential transition of the Coalition detention
facilities and detainees. Transitioning detainee
operations is a three-phase process
1. Phase 1 consists of individual and
collective training of Iraqi guards and
leaders, including training alongside
their U.S. counterparts inside the
facility.
2. Phase 2 consists of the removal of
U.S. guards and establishment of a
U.S. transition team to supervise Iraqi
Security Forces and to maintain legal
custody ofdetainees.
3. Phase 3 consists of the final removal
of all U.S. nersonnel and turnover of
the facilities and legal custody of the
detainees to the Government of Iraq.
The criteria for transfer includes the require-
ment for the Government of lrao to wssess
the tegal autnonty 10 hold securtr\ detainees,
each facility demonstrating the ability m meet
ihc care and custody standard. and the MOJ
-
 having effective oversight of the program.
MNF-1 is currently in Phase 1. Significant
challenges exist to ultimately meeting these
criteria. The Iraqi Corrections System has not
demonstrated the capacity to effectively
resource and run a major facility, such as
Camp Bucca. Additionally, based on the com-
position of the guard force, serious questions
remain as to whether they would be able to
maintain the required standards of care and
custody. The most significant obstacle
remains establishing the legal authority to
hold security detainees. There is widesoread
opposition inside the Sunci political leader-
sitp 10 providing 1h.s authorrt) to the Govcrn-
ment of Iraq
3.2 U.S.Force Adjnslments
In consultation with the military commanders
in Iraq, the Government of Iraq, and Coalition
partners, the Secretary of Defense continues
to advise the President on the appropriate
level of U.S. forces in Iraq and the surround-
ing theater of operations based on current
conditions. These conditions include, but are
not limited to, key elements of the MNF-I
.
Camoaien Plan. such as the increasinc
responsibillt) of the 1SF in counter-
insurgency operations and ownership of areas
of rcsporsibilit) and progress in the polncal
process.
Arbitrary deadlines or timetables for with-
drawal of Coalition forcesÑdivorce from
conditions in Iraq and the region-would be a
serious stnwg c error, as the) would suggest
In the terrorists. the Re~eciionisis, and the
various illegal armed groups in Iraq that they
can simply wait or stall to win. The absence
of a specific timetable does not mean that the
Coalition's ~osturcin Iran is static. On the
conua.3. the Coalmen continually reviews
the -iituat~onin Iraq and adjusts is po-iture
and approaches a? conditions evolve and Iraqi
capabilities grow.
MY TIMES
. -
As security conditions improve and as the ISF
becomes more capable of securing their own
country, Coalition forces will move out ofthc
cities, reduce the number o f bases from which
they operate, and conduct fewer visible
missions. However, they will remain postured
to assist, including supporting the ISF with
transition teams. Although the Coalition
military presence may become less visible, it
will remain lethal and decisive, able to
confront the enemy wherever it may gather
and organize.
The Coalition retains the ability to quickly
reinforce the Iraqi Army as required and to
provide critical enablers as Iraqis develop
their own capabilities. Coalition personnel
levels will increase, if necessary, to defeat the
enemy or to provide additional security for
key events, like the 2005 referendum and
elections. But the goal, over time, is to reduce
Coalition forces as Iraqis continue to assume
more of the security and civilian respon-
sibilities themselves. This process is already
under way.
The Government of Iraq has agreed to form a
Joint Committee with MNF-1 and the U.S.
and UK Embassies to develop a conditions-
based madmap for the full transition of
security responsibility to the ISF. This road-
map will consist of recommended conditions
intended to lead to the eventual and gradual
withdrawal ofmuiti-national forces from Iraq.
The Joint Committee for Achieving Iraqi
Security Self-Reliance (JCAISSR) will base
its roadmap on much of the successful work
that has already gone into developing the
strategy for transition of security respon-
sibility in Iraq:
The seating of the new Government of Iraq's,
based on its Constitution, sets the conditions
 for continuing progress toward Iraqi security
self-reliance. Toward this end, the govern-
ment's program calls for speeding up plans
for completing the preparation of the ISF;
speeding up the process of transferring
security responsibilities and powers to the
Iraqi Army, police, and security forces; and
cooperation with the multi-national forces in a
way that will allow the handover of security
responsibilities to the ISF, the completion of
the mission, and the exit of the multi-national
forces,
Development of the ISF
Efforts to develop the capacity o f the ISF
have been successfui. In November 2005, the
Iraqi Army had 4 brigades and 23 battalions
in the lead. As of August 7, 2006, the Iraqi
Army has 6 Division Headquarters,
25 brigades, and 85 battalions that have
assumed responsibility. MOI forces also grew
significantly, from approximately 93,000
trained and equipped members in November
2005 to more than 160,000today.
Provincial Imai ControlPlan
The Government of Iraq and MNF-I have
already developed a conditions-based frame-
work for the transition of security respon-
sibility from multi-national forces to Iraqi
leadership. As a result of this work, security
responsibility for Muthanna Province transi-
timed to the provincial governor on July 13,
2006. Security responsibility for as many as
nine of Iraq's provinces could transition to
Government of Iraq authority by the end of
2OOfi.
The JCAISSR wili comprise the Iraqi Prime
Minister, the Iraqi National Security Advisor
(Chair), the Minister of Stale for National
Security Affairs, the Ministers of Defense and
Interior, the Director of the Iraqi National
Intelligence Service, the U.S. Ambassador,
MY TIMES
!he UK Ambassador, and the Commanding
General and Deputy Commanding General,
MNF-I. This committee will be supported by
a working group of direct subordinates.
Conditions recommended by JCAISSR will,
at a minimum, include consideration of the
threat situation across Iraq, security force
readiness, capacity of key security and sup-
porting ministries, and development of the
overall Iraqi national security processes.
MNF-I will efficiently consolidate its foot-
print in Iraq to reduce its militaiy basing
requirements progressively. The MNF-I
basing strategy is an integral part of the
Campaign Plan. MNF-I uses a conditions-
based process to synchronize basing require-
ments with Coalition force structure and
projected command and control structure.
Several factors are considered when employ-
ing this process, including cost-effective use
of resources, maintaining security presence
where required by the mission and
maintaining only those bases required, transi-
tion of onerations to the ISF a"; the" continue
to assume the lead in security operations. and
other lacton Specificall) MNF-1 seeks to
minimize us presence in major cities while
building the f'enibili~ required to support
other elements in Iraq, including Coalition
partners, PRTs, Transition Teams, Depart-
ment of State activities, and other supporting
units and entities. This process will culminate
in the transition through Operational and
Strategic Overwatch, which wili leverage and
maximize support through a minimum
number of strategically located FOBS and
Convoy Support Centers.
As of August 7, 2006, MNF-I has closed 48
of hs 110 FOBS, handing over 31 to [SF,
MODNOI; and 17 to the Ministry of
Finance. Thirteen more FOBS are scheduled
for closure and handover by January 2007.
 Straieaic Communication Plan
5th Stability and Security Report to Congress

r o u l r Section 9010 of the Depannient of Defense A p p r o p n u t ' i Act 2006 requires t

k SECDEF to provide a
quarterly report to Congress that measures the progress toward achievingstability and security in iraq. Media attention of the
previous report focused on sectarian violence (high attack trends and casualty state), opinion polls regarding coalition forces, ISF
numbers and operations, and report data in context of events of lhe day (increase in US troop leveis).

Media focus for this quarter's report will likely focus on discussion of CMI
war, and the rise in attacks and increased civilianflSF
casualties.

TODLine Messages:
- W e have a comprehensive and coherent strategy for unity, security and prosperity in Iraq
-The Iraqi security forces are better equipped, better trained and more experienced than they were three months ago.
*This rnetrics report helps us keep Congress informed, but it is only one aspect of our assessment for orooress in Iraa
Metrics help us achieve our strategy bv focusing efforts on accomplishing actions that support a secure. stable iraq with a
democratic system supported by ail Iraqis and accepted by the irternationai community

Talking Points:

There is a qualitativedifference between civil war and sectarian violence, and we are not in a civil war.
0 The majority of Iraq's provinces remain in relative peace, but Baghdad, in particular, draws global attention and k the target for

sensational attacks that exaggerate the impact of terrorists, illegal armed groups, and violentextremists.
v -Central institutionssuch as the governmentand security forces are functioning, and violence is geographicallydefined, not
resulting in the mass movement of population,
u
co

*This is a decisive time in Baghdad and it requires decisive Iraqi action with our clear support.

-
In Operation Together Forward, Iraqi security forces, with coalition in support, are focusing on key neighborhoodsin Baghdad.
Since mid-July, statistics measuring levels of violence have trended down. While a positive indication, it is far too early to call this

-
a continuingtrend.
Lots of hard work rema ns for Coalition forces. Iraqi security forces, the Iraqi government and the Iraqi people
-The security situation is at its most wmpkx state since OIF began. so the results of the stepred uo effort will take time
The ~aghdadinitiative's initial phases demonstrate that the combinationof security forces, bbvernhent action, and cooperation
of citizens can accomplish a great deal

1 - The first tn4y representativegovernment is in place and dealing with the securii issue,
as of 29 Aug 06 I
 Prime Minister al-Maliki's government and Coalition forces are adapting the Baghdad security plan to meet the changing
WndBions on the ground.

4 While terrorists and extremists continue to destroy innocent life in Iraq, they have not shaken the determination of the Iraqi people
u to build afree country.
& The wlitical orocess continues
4 polls show l&is have confidence in their government to improve the situation (approximately80% of Baghdad, Kurdish, Mii-
. - ."
Euphrates and southern citizens said in June thev have oreat deal or fair amount of confidence new Iraoi aov't can imorove
situation in Iraq) (pa)
- - -

4 While the majority of the population is concerned about in increase in sectarian violence, their concern that a civil war might
happen has decreased since March (p40)
4 Confidence in the Iraqi Anny has stayed stable or increased (p43)
4 Iraqis must choose to end sectarian strife that has potentialto be self-sustaining

4 The Iraqi security forces continue to progress

4 5 Iraqi divisions, 25 brigades and 85 Iraqi army battalions are in the lead (32 percent increase since last report)
4 More than 84 percent of MOD end-strength have been trained and equipped
4 More than 92 percent of authorized Iraqi Army battalions have been generated
 Page 1 of 2

1 will be on the call.

kflf
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Sent: Thu 8/31/2006 341 PM
T O : V I W, -A
subject: Conference OilTOMORROW

MEMORANDUM
To: Retired Military Analysts
From: Dallas Lawrence
Director, Community Relations and Public Liaison
Office of the Secretary of Defense

Date: August 3 1,2006

Re: Conference Call with Senior DoD Officials

We invite you to participate in a conference call, FRIDAY,September 1,2006,from 11:4S-12:15.

Assistant Secretary of Defense for International Security Affairs Peter Rodman flaio at:
h11v.1XO
B
?-I- and Vice D m o r for
Strategic Plans and Policy Rear Admiral William Sullivan (bio at
&I w m- wll bnef you on h e Qunrtedy Repon on ltnq
Stability and Security. This call will be On Background
To participate in this conference call, please dial and ask the operator to connect you to
the Analysts conference call.

Please R.S.V.P.
id T call her at1
 Page 2 of 2

We hope you are able to participate.

12/3/2007

BY TIMES
 Page 1 of 1

8OM: ~ 0 1 . 2 0 11:23AM
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AttaehiKMif: Augual2006 MwauIng Stability and Security In Iraq Report.pdf,SKurity S W i C o r n Plan
(August 06).dOC

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MY TIMES
 Measuring Stability and
Security in Iraq
August 2006
Report to Congress
In accordancewith the
Departmentof Defense Appropriations Act 2006
(Section 9010)

MY TIMES 1488
 Table of Contents

Executive Summary 1

.
1 Stability nod Securily in Iraq .-.......-..a...ã.-.-.-.......-....ã.............................. --...
" 5
1.1 Political Progress .....................................................................................................
5
1.2 EconomicActivity ................................................................................................. 13
1.3 The Security Environment ..................................................................................... 25

.
2 Iraqi Security Forces Training and Performance. 41
2.1 Progress in Training and Equipping the Iraqi Security Forces .............................. 41
2.2 Progress in Assuming Leadership in Counter-Insurgency.....................................43
2.3 Ministry of Interior ................................................................................................ 44
2.4 Ministry of Defense ............................................................................................... 52

.
3 Transition -.......................................................... " ...................................... 59
3.1 Transitioning Security Responsibility 59
3.2 U.S. Force Adjustments .........................................................................................
62

This. report to Congress on ine* stability and security in Iraq u subnuncd

pursuant to Section 9010 of the Department of Defense Appropna- Act 2006.
fib& Lav W9.148 .This. is the fifth m a s& of repom on this subject and the
thin) under Section 9010. The matt recent report WM aubnutied in May 2006 .

BY T U B S
 Executive Summary
This report is divided into three sections. The
. .
frst section. "Stability and Security in Iraa."
describes trends anc progress toward meeting
v goah tor polit.cal stability, strengthened em-
nomc activ.0, aid a stable security environ-
ment in Iraq. The second section, "Iraqi Secu-
rity Forces Training and Performance," de-
scribes progress in the training, development,
and readiness of the Iraqi Security Forces
(ISF), including the forces of the Ministry of
Defense (MOD) and the police and paramili-
tary forces of the Ministry of Interior (MOI).
The third section, "Transition,"ddescribesthe
transfer of security responsibility from Coali-
tion forces to the Iraqi government, including
prerequisite conditions and criteria for assess-
ing the readiness of provinces to assume
responsibility for security.
A classified annex to this report provides data
concerning security force training and per-
formance and addresses possible U.S. military
force rotations.
The information in this report is made avail-
able with the assistance of many departments
and agencies of the U.S. Government, the
U.S. Embassy in Iraq, Multi-National Force-
Iraq. (MNF-I), and the Government of Iraq.
The renort comnlements other reoorts and
ntonnation abott Iraq provided to Congress
and does nm replace them. The intent of this
document is to report on the measures of sta-
bility and security specified in Section 9010.
Meuures or Slohifltv i SsmOr and fhc
for V i c m in I r q
Nalif)nalSIm~~s\'
The Picsidcnt's National S t r a t w for Victory
g&g lays out thc goals and gencral frame-
work to achieve securer and siaoiiity in Iraq
The goal of the siiatcgy is to help the Iraqi
people build a new Iraq with a constitutional
and representative government that respects
political and human rights and with sufficient
security forces both to maintain domestic
order and to prevent Iraq from becoming a
a f e haven for terrorists. To this end, the
United States is pursuing an integrated strat-
egy along three broad tracks:
.
Political: Helping the Iraqi people forge
a broadly supported compact for demo-
cratic government
'Economic: Assisting the Government
of Iraq in establishing the foundations
for a sound market economy with the
. capacity to deliver essential services
Secirity: Contributing to an environ-
merit where Iraqis are capable of defeat-
ing terrorists and neutralizing insurgents
and illegal armed groups
Each track is integrated with the other two,
and success in each affects success in the
others. Security depends, in part, on a demo-
cratic political process, which In turn
depends, in part, on economic opportunity.
Economic progress depends on securing the
Iraqi infi-asiructurc against sabotage and
attack and protecting the Iraqi people from
violence that undermines individual participa-
tion in economic development and the politi-
cal process.
Although the National Strateev for Victory in
is m t a detailed plan for achieving SF+
cific objectives, consistent with the public
nature of that document, it delineates measur-
able trends along each of these tracks to
indicate where programs are achieving sue-
cess and where it is necessary to increase
efforts or adjust implementation of the
strategy.
 M a j o r Milestone8 Toward a Democratic Iraq

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The President's strategy also identifies eight i n Iraq. The appointments o f the Ministers o f
objectives, or pillars, of the integrated poiiti- Interior. Defense, and State for National

.
cal, economic, and security strategy:
Defeat the terrorists and neutralize the
insurgency
Transition Iraq to security self-reliance
Security Affairs, on June 8,2006. marked the
corn~lctionof a national unity -
. aovernment.
within one month o f seating this government,
Prime Minister Nouri al-Maliki presented a
"National Reconciliation and Dialoeue

-
Help Iraqis forge a national compact for
democratic government Project" to the Iraqi Council of Representa-
Help Iraq build government capacity tives O. R ) .. This oroiect
. . is a broad initiative
.. and provide essential services
Heip Iraq strengthen itseconomy
Help Iraq strengthen the rule of law and
aimed at reconciling past inequities; rallying
Iraqis around a principle o f equality, devoid
o f sectarian divisions; firmly establishing the
promote civil rights
Â
. Increase international support for Iraq
Strengthen public understanding of
Coalition efforts and public isolation of
basis of national unity via a democratic politi-
cal process; and creating the conditions for
Iraq to assume a leading role both in the
region and internationally. Additionally, the
the insurgents
CoR began its work in June with an accel-
Key indicators of progress since the last crated schedule of sessions. Most of the
report are discussed below. 24Council Committees have formed and
named chairs. The CoR is making some pro-
Political Proereas. This report marks the first gress on key legislation required to implement
90 days of the first representativegovernment the provisions of the Iraqi Constitution.

MY TIMES
 &ww&W&. m e Iraqi m n o m y con-
tinues to show progress, but still needs to
overcome serious challenges, As the Govern-
. -
ment o f Iran was formed iust 90 davs am. hs
inslnutions are still forming or arc immature
and consequently strup,gle with many macro-
economic issues. The new government has
affirmed its commitment to programs sup-
ported by the Stand-By Arrangement with the
International Monetary Fund (IMF) by taking
important and decisive measures, notably
price increases for refined petroleum products
that meet I M F targets. The Executive Board
o f the I M F subsequently completed its first
and second reviews o f Iraq's performance
under the Stand-By Arrangement on
August 2,2006.
Iraq continues to make progress reducing its
Saddam-ern debt. As o f July 2006, 17 o f 18
Paris Club creditors have signed bilateral
agreements to forgive 80% o f Iraq's sover-
eign debt. Russia is the only Paris Club
creditor that has not yet signed a bilateral
agreement with Iraq. I t has, however, agreed
in principle on debt relief terms and will
finalize an agreement shortly. Middle Eastern
creditors, which hold the majority o f the
present debt, have not signed bilateral debt
reduction agreements.
Average peak electrical generating output
increased 15.8% this auarter to 4.573 meca-
wans (MW) and continued to increase over
the quarter. Iraq ateraged 14 hours o f power
per day this quarter, an improvement o f
3 hours per day over the previous quarter.
Crude oil production for the second quarter
improved 18% to 2.2 million barrels per day
(mbpd). and exports improved by 20%. to
1.6mbpd. Also during this quarter, Iraq
resumed exports from northern fields for the
first time since the autumn o f 2005. However,
o i l production and exports still fell short of
the Iraqi goals o f 2.5 mbpd and 2.0 mbpd,
MY TIMES
respectively. Approximately 90% of the Gov-
ernment o f Iraq's revenue comes from oil
exports, and higher prices for Iraqi oil con-
tin= to somewhat offset lower than desired
export volumes.
=iv Environment. Setbacks i n the
levels and nature o f violence in Iraq affect all
other measures o f stability, reconstruction,
and transition. Sectarian tensions increased
over the past quarter, manifested in an
increasing number o f execution-style killings,
kidna~oincs.
~ r, w .
and attacks on civilians. and
increasing numbers o f internally displaced
persons. Sunni and Shi'a extremists, parIicu-
larly al-Qacda i n Iraq and rogue elements of
Jaysh al Mahdi (JAM), are increasingly inter-
locked in retaliatory violence and are con-
testine control o f ethuicallv mixed areas to
expand their existing areas of influence Con-
cern about c.vil war within the Iraqi civilian
population and among some defense analysts
has increased i n recent months. Conditions
that could lead to civil war exist in Iraq.
Nevertheless, the current violence is not a
civil war, and movement toward civil war can
be prevented. Breaking the cycle o f violence
is the most pressing goal o f Coalition and
Iraqi operations.
I n the current reporting period the average
number o f weekly attacks increased 15% over
the previous reporting period average, and
Iraai casualties increased bv 51% cornoared
to the previo~squaner Much o f this violence
occurred in Baghdac. as terrorists. insurgents,
and illegal armed groups recognized and
exploited the political and economic signifi-
cance o f conducting operations in the capital
city. However, the Coalition and the Govern-
mew o f Iraq continued 10 make progress this
quarter, improving the security environment
1 Fallujah and some parts o f northern Iraq.
Although sectarian violence threatens the
effectiveness o f the Government o f Iraqi,
terrorists have failed to derail Iraq's political
 process, or to widen their political support
among the Iraqi people. Polling data continue
to show the confidence of most segments of
the Iraqi people in the Iraqi Army and their
rejection ofal-Qaeda's vision of Iraq's future.
Iraai Security Forces. MOD and MOI secu-
rity forces continue lo increase in size and
capability and are increasingly assuming the
lead combat responsibility from Coalition
forces.
Training, equipping, and fielding security
forces continues. Approximately 277,600
Iraqi soldiers and police have completed ini-
tial training and equipping, an increase of
more than 14,000 in the three months since
the last report. As of August 2006, approxi-
mately 84% of the objective end-strength of
MOD forces have been trained and equipped,
while more than 92% of authorized Iraqi
Army battalions have been generated.
Remaining min-and-equip efforts will focus
on building combat support and combat
service support forces.
More Iraqi units are able to take the lead in
combat operations against the insurgency and
HY TIMES
to assume security lead in their territory. The
number of counter-insurgency operations con-
ducted independently by Iraqi forces as a per-
centage of total combat operations continue
to increase steadily. Approximately one-third
of the company-sized operations in Iraq
during the reporting period were conducted
independently by Iraqi forces. As ofAugust 7,
2006. there were 85 Iraqi Army battalions
(5 divisions, 25 brigades) that have assumed
the lead for counter-insurgency operations, a
35% increase since the last report. All 27
National Police battalions are currently con-
dueling counter-insurgency operations, and
2 National Police battalions have the security
lead for their areas ofresponsibility.
Transition. Iraq achieved a historic milestone
on July 13, 2006, with the transfer of security
responsibility in Muthanna Province from
MNF-I to the Provincial Governor and the
civilian-controlled Iraqi Police Service (IPS).
Moreover, since the May report, MNF-1 has
transferred a i additional10 f-ornard Operat-
ing Baws (FOBS) to the Government of Iraq
. - of 110 FOBSarc now under Iraqi
Fom-eieht
control.
 1. Stability and Security in Iraq
1.1 PoUtleiI Progress
The goal of the political process in Iraq i s to
help the Iraqi people forge a broadl) sup-
ported national compact for dcmocrat,~&ow-
ernment, thereby isolating enemy elements
from the broader public. The United Stales is
supporting this effort by:
supporting Iraqi leaders in their efforts
to include all Iraqis in the political pro-
cess, through dialogue and inclusive
institutions;
offering advice and technical support
.
for effective governance;
helping build national institutions that
transcend regional, sectarian, and tribal
lines: and
assistiig Iraqis in replacing the corrupt
and centralized Ba'athist system wnn
effective government bodies at local,
provincial. and national levels.
Measures of political progress and stability
include:
achievement of political goals set forth
in the Iraqi Constitution, as well as
those in United Nations Security Coun-
cil Resolution 1546 and the Transitional
Administrative Law;
formation of a national unity govern-
ment representative of all Iraqi wm-
.. munities;
. - .
oarlicioation in the ~oliticalorocess bv
i l l Iraqi communities and evidence that
the) Ã ew the process as legitimate and
.
effective;
adherence to rule of law institutions;
and
expansion of international support.
HY TIMES
With the seating of its constitutional govern-
ment, Iraq, with the support of the Coalition,
completed all the milestones required under
United Nations Security Council Resolu-
tion 1546.
The National Strategy for Victory in Iraq lays
. - . .
out a soecific three-mnzed wlitical olan to
assist the Government of Iraq in building a
broadly supported national compact for demo-
cratic governance.The plan seeks to:
"^Isolate enemy elements from those
who can be won over to the political
. process by countering false propaganda
and demonstrating to all Iraqis that
they have a stake in a democratic Iraq;
Â¥ Engage those outside the political
process and invite in those willing to
turn away from violence through ever-
expanding avenues of participation;
and
d Build stable, pluralistic, and effective
tmtioml institutions that can protect the
interests of all Iraqis, and facilitate
Iraq's full integration into the interna-
tional community."
After successful national elections in Decem-
ber 2005, Iraqis made the commitment to
establish a broad unity government. Rather
than allocating all government positions to the
majority party or coalition, this unity govern-
ment sought to provide fair representation in
the ministries and other government posts
among all major parties that won seats in the
CoR. Consistent with this commitonent. Prune
Minister al-Maliki announced and won CoR
approval for his cabinet, which draws minis-
ters and senior officials from parties repre-
senting all regions, sects, and ethnic groups.
The announcement met the constitutionally
mandated deadline, but Prime Minister
al-Maliki opted to delay filling the positions
of Minister of Defense, Minister of Interior,
and Minister of State for National Security
Affairs to ensure broad support within the
CoR for thesesensitive positions.
On June 8, 2006, after additional negotiations
and compromise, the Prime Minister prc-
sented his nominees for the two security
ministries. The CoR approved the appoint-
merits by a majority, confirming Jawad
al-Bulani as Minister of Interior and Abd
al-Qadr Muhammad Jassim al-Mufraji as
Minister of Defense. The CoR also approved
Organizational Structure of the Government of Iraq
the appointment of Shinvan al-Waili as Min-
ister of State for National Security Affairs.
The appointment of the Ministers of Interim,
Defense, and State for National Security
Affairs marked the completion of Iraq's first
representative government. The resulting
cabinet is remarkably inclusive. The new gov-
eminent reflects the diversity of the Iraqi
people and, with a freely elected parliament
and a popularly ratified constitution, is a strik-
ing contrast to the oppressive, o n m a n rule
of Saddam Hussein just three years ago.
Poll data indicates that the majority of Iraqis
have confidence in the new government;
notably, however, confidence levels are
lowest in mixed find predominantly Sunni
areas, such as Kirkuk and Tikrit/Baqaba.
 How much eonfidance do you have In the haw Iraqi
p w m m e n f t o Improve the situation In Iraq?.

The Iraqi Constitution, adopted by popular
referendum on October 15, 2005, requires
approximately 55 enabling or implementing
acts, in such significant and broad areas as
judiciary development and economic reform,
to make the Constitution operative. Passing
and enforcing this legislation will be a key
, indicator of progress for the new Government
of Iraq.
Additionally, the CoR began its work in June
with an accelerated schedule of sessions.
Most of the Council Committees have been
formed and have named chairs. The CoR has
made some progress on key legislation,
including progress toward new Electoral
Commission legislation, the first step on the
path to provincial elections. However, link
substantive legislation was passed in the
session that ended in July.
The two critical political events facing the
CoR and the Government of Iraq over the
next few months are the constitutional amend-
ment process and provincial elections.
 ProgressToward a Democratic I r a q 2006
Inql Oovmnwnt F O m r t l 0 "
TheNational ReconciliationProcess
On June 25. 2006. Prime Minister al-Maliki
presented to the CoR a "National Reconcilia-
tion and Dialogue Project" a 24-point initia-
tive aimed at reconciling past inequities,
rallying Iraqis around a principle of equality
devoid o f sectarian divisions.
The National Reconciliation and Diatomic
Project i s intended to open dialogue, r e d m
sectarian tensions and \ i o l a c c in Iraq, and
increase commitment to the democratic pm-
cess and the new national unity government.
The project will operate on three levels. At
the national level, the High National Commis-
sion of the National Reconciliation and Din-
logue Project will be composed of represents-
lives from a diverse cross-section of political,
religious, ethnic, tribal, and cultural groups
under the leadership of the Minister of State
for National Dialogue. The second level will
be provincial subcommittees, and the third
level w i l l be field committees, which will
focus on key components o f national recon-
cilialion and will evaluate progress.
As part of the National Reconciliation and
Dialogue Project, a conference o f tribal
leaders took place o n August 26, 2006, in
Baghdad that resulted in a statement
condemning sectarian violence, and endorsing
the reconciliation plan. I n the coming
months, the government w i l l convene a
conference o f religious scholars. The govern-
mem is supposed to convene a conference of
political parties to encourage the democratic
process and to solidify support for the
Government o f Iraq.
To achieve unity, security, and prosperity,
Iraq must develop the capacity to deliver gov-
ernment services to its citizens at the national,
provincial, and municipal levels. The Govern-
ment of Iraq must transform the country from
 a centralized state, with delivery of essential
services traditionally controlled by powerful
bureaucrats. 10 a responsive federal govern-
ment with decentralized control. This change
will take time, consistent mentorship, and an
emphasis on both promoting transparency and
reducing corruption. The Coalition is support-
ing these efforts at all levels of the Govern-
ment of Iraq.
National Institutions
National institutions and forces are essential
to displace illegal armed groups and to serve
moderate sectarian and local loyalties. The
United States supports the development of
non-sectarian institutions and the growth of
independent media and civil society institu-
tions, while continuing to encourage the Gov-
ernment of Iraq to proceed with the
Organizations Supporting Iraqi Ministries
HY TIMES
announced and planned national rcconcilia-
tion process.
The diagram below shows the organizations
currently helping Iraq develop its capacity to
govern effectively. Ministerial capacity devel-
opment is the main focus of the U.S.
Embassy's Ministerial Assistance Teams
(MATS). These teams. comoosed of civilian
and military experts in governance and organ-
izational development, mentor and train both
the Iraqi ministers and their senior staffs in
such areas as budget development and execu-
tion, inter-ministry coordination, personnel
management, and procurement. Iraq Recon-
struction Management Office (IRMO) ofi-
cials provide expertise in key sectors, such as
oil, electricity, and health, to Iraqi minister's
and other high-level government officials.
Assistance to Provincial Governments
Provincial Reconstruction Teams (PUTS)
work uith provincial governors and circled
councils lo improve execution of pm~lncial
government responsibilities and to increase
citizen participation in governmental deci-
sion-making processes. The teams are
intended to develop core competencies in
public administration, finance, budgeting,
planning, and accountability by boosting
government capacity and transparency at the
provincial level. Four U.S.-led PRTsare fully
operational: PRT Tamim (Kirkuk), PRT
Ninewah (Mosul), PRT Babil (Hillah), and
PRT Baghdad. The security situation in some
provinces hampers interaction between the
team and provincial leaders.
Promoting the Rule ofLaw
Political stability in Iraq is predicated on die
effective rule of law in the country. (Note:
Police and associated institutions are dis-
cussed in Section 2 of this report.) Effective
i l e of law in Iraq, as in any country, requires
four conditions to be met: effective laws.
police to enforce them, courts to administer
them, and prisons to incarcerate offenders. If
any one of these institutions fails, or cannot
work with the others, the Irani reeime will be
unable to enforce the rule o f i a w r ~ h eUnited
States, its Coalition partners. and international
agencies are helping Iraq strengthen the rule
of law. Although there have been some posi-
live developments, delay in the formation of
the Government of Iraq resulted in a loss of
momentum; rule of law initiatives slowed,
which contributed to the growth of crime, cor-
ruption, and illegal m e d groups.
The Iraqi Constitution sets forth a comprehen-
sive list of rights and freedoms, but additional
legislation is needed to implement those guar-
antees. The Constitution maintains the inde-
pendence of the judicial branch, but vests
considerable authority in the CoR to define
the fanctions of the courts, raising the risk of
undue influence by political or religious
groups. Iraq's criminal legal framework is not
presently robust enough to adequately address
contemporary criminal activity. such as
organized crime, trafficking, and some tech-
nology-related crimes. Legal experts from the
U.S. Government are assisting Iraqi legal
scholars in creating a legal system that can
balance the requisites of modern international
law with Iraqi cultural and legal traditions.
"Hie Coalition continues to provide adminis-
trative support as well as technical and legal
assistance in drafting legislation.
The Coalition has helped the Government of
Iraq improve the judicial system in several
areas, including building or renovating wurt-
houses, expanding the Central Criminal Court
o f Iraq (CCCI), and improving security. The
CCCI, for example, now has 12 panels
Operating throughout Iraq. It processes, on
average, US insurgency-related cases each
month. Due to the limited capacity of the
11 panels outside Baghdad, the Baghdad
CCCI is the primary facility for hearing insur-
gency cases.
Poor security for judges and judicial facilities,
an insufficient number of judges, and an
inadequate court infrastructure undermine
advancements in the rule of law in Iraq.
Judges are subject to intimidation and in
many areas arc afraid to prosecute insurgents.
The U.S. Government, through the U.S.
Marshals Service, responded by providing
secure housing, personal security details,
courthouse protection, and personal protection
firearms to some members of the Iraqi
judiciary. In Baghdad, the Coalition has pro-
vided facilities for 22 judges to reside in the
 International Zone. Working in conjunction
with MNF-I, the U.S. Marshals Service has
begun training an Iraqi Marshals Service. The
U.S. Department o f Justice, along with the
U.S. Departmento f State and the U.S. Depart-
ment of Defense, is proceeding with plans for
the renovation and construction of Iraqi
courthouses and other related court facilities,
including witness protection buildings. As of
July 21, 2006, approximately 20 projects to
improve judicial capacity have been com-
p i e d , and 13 more are under way. Five addi-
tional projects are planned.
The U.S. Department of Justice estimates that
Iraq needs 1,500 judges, yet only about 740
judges are currently serving. The Iraqi
Ministry of Justice's (MOJ) Judicial Training
Institute has enrolled a new class of 180
students (40 judges and 140 prosecutors) i n a
2-year program to train new judges and
prosecutors. When this class graduates in the
fali o f 2007. there will still be a significant
shortfall in judges. T o help address this need,
the Iraqi Chief Justice recently nominated 200
lawyers to serve as investigative judges. If
these judges are confirmed, the number of
judges w i l l rise to 940. By the fali of 2007.
approximately 980 judges will be serving in
Iraq, an increase o f 32%. but still well short of
the requirement.
The MOJ is responsible for imprisoning con-
victed criminals and insurgents in Iraq. MOJ
prisons generally meet international stan-
dards, but are already at maximum capacity.
As a result, many detainees spend time in
M O i or M O D facilities, which generally fill1
short of internationally accepted standards. To
address this issue, the U.S. and Iraqi govern-
ments are funding construction o f seven new
MOJ prison facilities, one each in Basrah,
Khan Bani Sa'ad. Nasiriyah, Dahult, and
Baladiyat, and two in Rusafa. Work has
NT T U B S
stopped at Khan Bani Sa'ad and Nasiriyah
due l o problems with the primary contractor.
Bridge contracts have been awarded to local
Iraqi contractors to provide site security and
I 0 perform some continuing construction
work. The Gulf Region Division o f the U S .
Army Corps of Engineers anticipates that
contracts will be issued to a new contractor in
September and that both facilities will be
completed in April 2007. Construction at the
two Rusafa facilities has been delayed due to
a title dispute between the Ministers ofJustice
and Interior. The title dispute is currently i n
litigation i n the Iraqi courts. Dahuk, a
1,200-bed facility i n the Kurdish region, is
scheduled for completion i n February 2007.
Construction at Baladiyat was completed and
the prison facility there has been activated and
is currently in use by the Iraqi Corrections
Services. Upon completion i n mid-2007, all
of these faciiities w i l l add a combined 4,800
beds. Even with these additions, however,
projections show another 20,000 beds will
ultimately be needed. Thus, the Government
o f Iraq must address insufficient bed space,
enactment o f custody transfer taws, abuses in
M O I and M O D detention faciiities, and the
need for more guards and trained supervisors.
The Government o f Iraq also faces the
problem of prisoner-detaineesawaiting adju-
dicatiodresolution o f the charges against
them. The M O i and M O D are believed to be
detaining between approximately 2,000 and
10,000 people in prc-trial status, many in
crowded, substandard faciiities.
Security Inte-
I n addition to criminal detainees and convicts
held by the Government o f Iraq, MNF-I holds
security internees (or detainees) under the
authority o f United Nations Security Council
Resolution 1637. As o f July 16. 2006. Cmli-
1011 forces held 12,388 such security internees
outside the Iraqi criminal system. Detainees in
MNF-1 custody arc treated in accordance with
 Geneva Convention principles. The U.S. Gov-
ernment has initiated a dialogue with the
Government of Iraq in an effort to transfer
these internees to Iraqi custody. However,
Iraq currently lacks the legal authority to hold
security internees outside o f the judicial
system. Therefore, neither MNF-1-held
detainees nor MNF-I-mn detention facilities
can presently be transitioned to MOJ control.
The Coalition continues to u x e the Govern-
ment of Iraq to accept transfer o f security
internees in a way that ensures their humane
treatment. Those detainees who do not pose a
i o u s threat to the citizenry are released as
promptly as possible. (The detainee release
program is described i n more detail later in
this report.)
A n t i - C o m ~ t i o nInstitutions and P r o m s
The Government o f Iraq has made a public
commitment to eradicate corruption and to
empower anti-corruption institutions. Coali-
tion support for this effort is focused largely
- .
on the three main anti-comption institutions
in Iraq: the Board of Supreme Audit (BSA),
the Commission on Public Integrity (CPI),
and the Ministerial Inspectors General (IG).
Both the BSA and CPI have new constitu-
tional status, and the CPI has become the lead
Iraqi anti-comption agency. The CPI has
investigated 1,158 cases this year.
The CCCI, which has jurisdiction for public
corruption cases, does not have the capacity
to process all its corruption cases. There are
826 criminal cases pending or under active
prosecution.Over the past 20 months, 56 offi-
cials in Iraq's ministries were either convicted
or subject to arrest warrants. The fact that
there is a functioning process for investigating
and prosecuting corruption. and that some
w m p t officials are being brought to justice,
is a nositive sim. However. the ability o f the
government to prosecute corruption cases suc-
cessfully is hampered by the lack o f enabling
UY TIMES
legislation, lack o f CCCI capacity, and intimi-
dation o f investigators and judges.
Since the liberation o f Iraq, there have been
significant successes in the development o f
legitimate political institutions and processes.
The unfolding of the democratic electoral pro-
cess over the course of 2005 was a crucial
success. Despite these achievements, how-
ever, the political process has encountered
obstacles.
The nature of violence i n Iraq is multifaceted.
Ilieffallv armed croups that reiect the oolitical
if
often d o so because long.~tandine
grievances, extremist beliefs, tribal affilia-
tions. andor personal vendettas No one strat-
egy can address every grievance. A vocal
minority of Iraqis (e.g., religious extremists)
fundamentally opposes the idea of a demo-
cratic Iraq. Further, some Iraqis who have
joined the political process are condoning or
maintaining support for violent means as a
source o f political leverage.
The continued violence in some areas, espe-
dally i n Baghdad, hampers the formation of
legitimate national institutions. I n some towns
and neighborhoods, local illegal armed groups
are seen as the primary providers of security
and basic social and essential services. With
the extended delay in formation of the
national government and capable ministries,
these armed groups have become more
entrenched, especially in svme primarily
Shi'a sections o f Lastcrn Baghdad and certain
Sunni neighborhoodsin Western Baghdad
-
. the attemDtcd kidnao-
Security issues (ex..
ping "fa dtfput) minister and threats to mims.
try personnelwho work with Embassy learns)
have made some ministers reluctant to have
U.S. personnel visit them. This reluctance
hampers coordination between the Coalition
and some ministry personnel. Internal politics
(e.g., political party affiliation) is alw an
obstacle to progress in some ministries.
Some Iraqi ministers tend to focus on near-
term performance, rather than on long-term
capacity building. A lack of effective proce-
dures within the ministries, such as policy
development, procurement, and budgeting,
was endemic to the Iraqi government under
Saddam Hussein, and three years is not
enough time to reverse decades of organiza-
tional incapacity. This situation should
improve with time.
Lack of proper "tools," such as information
technology, finance systems, and planning
capabilities, inhibit the governing of complex
issues. The result is that Iraqi planning, budg-
eting, and execution processes are less than
fully effective. IRMO is currently procuring
and developing these tools, but it will take
ti-years rather than months-kfore
Government of Iraq staff is able to use these
tools fully and to manage the ministries to full
effectiveness.
Foreien Interference
Iran and Syria undermine the Government of
Iraq by providing both active and passive
support to anti-government forces that tend to
fuel &no-sectarian tensions. The Coalition
and the Government of Iraq have acted to
counter the Iranian and Syrian influence by
tightening security at the borders. However,
the borders are porous, and eliminating the
transfer of illegal material and foreign fighters
into Iraq is a formidable challenge.
13
Corruption in the ministries has further ham-
pered their capubilities. Experienced or la!-
ented employees are often purged and
replaced with pafty elemenwcronies as a
result of a spoils system. Many of Iraq's
political factions tend to view government
ministries and their associated budgets as
sources of power, patronage, and funding for
their parties. Ministers without strong party
ties often face significant pressure from the
political factions, and sometimes have little
control over the politically appointed and
connected people serving under them. Still
entrenched in the culture of the former
regime, some ministry personnel are reluctant
to exercise independent initiative or to take
any bold action to address Iraq's problems of
corruption.
The National Strateav for Victory in Iraq
underscores three objectives in helping the
Iraqis build their economy:
Building the capacity of Iraqi institu-
tions to maintain infrastructure, rejoin
the international economic community,
and improve the general welfare of all
Iraqis
à Reforming Iraq's economy, which has
been hindered by war, dictatorship, and
sanctions, so that it can be self-sustain-
ing in the filture
Restoring Iraq's neglected infrastructure
0 that it can meet an increasing
demand and the needs of a growing
economy
This m e w rounds out & N & d
m005.2007j of the
"-19. SOW
Government of Iraq, whose national eco-
nomic objectives are:
- Strengthening the foundations o f eco-
nomic growth
 Revitalizing the private sector
Improving the quality o f life
Strengthening good governance and
security
Buildins the IraeiEconoq
The formation o f a new covemment allowed
Iraq to refocus on its economic agenda, i n the
second quaner, the new government affirmed
its commitment to the reform program sup-
ported by the Stand-By Arrangement and is
moving forward with implementation o f that
program. The new government maintained
fiscal discipline, raised domestic fuel prices to
the targeted levels i n the Stand-By Arrange-
ment, sent a fuel import liberalization law to
the CoR, and increased targeted support for
the poor. The Executive Board o f the I M F
subscqucntly completed its first and second
review of Iraq's performance under the Stand-
By Arrangementon August 2,2006.
Although the Government o f Iraq missed h e
March 2006 deadline for the state &el-price
increase required by the Stand-By Arrange-
ment for refined petroleum products, on
July 1, 2006, the new Government of Iraq
increased prices (reducing subsidies) for
regular and m m i u m " .
easnline.. benzene.. liaue-
ficd petroleum gas (LPG), kerosene, and
diesci pwdi-cis. thus meeting or exceeding the
W Stand-Ry Arrangement-mandated price
increases
Inflation threatens the overall macroeconomic
stability that Iraq has maintained since the
war ended. Ongoing violence and supply dis-
niptions are pushing prices higher. The
Central Bank of Iraq (CBI) must further
tighten monetary and exchange rate policy to
prevent high inflation from becoming
entrenched.
Iraq continues to make progress reducing hs
Saddam-era debt. Iraq's debt was estimated at
US$125 billion after the war. This was almost
five times the gross domestic product (GDP)
i n 2004, an unsustainable burden on the Iraqi
economy. The historic November 2004 debt
relief agreement with the Paris Club members
and subsequent agreements with commercial
and other official creditors, as well as some
rum-Paris Club creditors, arc helping bring
Iraq's debt to sustainablelevels.
As o f July 2006, all 18 Paris Club crcdhors
exccot Russia had siened bilateral acreements
to forgive 80% o f lr&i sovereign dcbt owed.
Russia is expected to sign an agreciicnt iMth
Iraq soon i n addition. Iraq has completed us
program to restructure commercial claims
from commercial and other official creditors.
Paris Club - USt41.7 billion owed
before signed bilatemls; USS34.2
billion w i l l be forgiven under Paris
Club terms, including a future Russian
agreement.
Nor-Paris Club sovereign debt -
approximately US$63 billion owed
(USI2.75 billion worth o f debt relief
agreed to on USS3.3 billion worth of
debt, thus far).
Commercial and other official creditors
- debt relief deals completed on
USS19.7 billion o f commercial and
other official debt.
As long as Iraq continues its progress on
implementing the economic reforms in the
I M F Stand-By Arrangement, the country will
remain eligible for the final 20% o f debt
reduction agreed under the Paris Club terms.
Sixty percent of the Government of Iraq's
debt to Paris Club members has already been
forgiven, and continued successful comple"
 tion of the Stand-By Arrangement will qualify
Iraq for a final tranche of 20% i n late 2007 or
early 2008. The United States forgave all of
Iraq's debt (USM.1 billion) and is encourag-
ing other creditors to follow this example.
Debt relief from non-Paris Club creditors is
expected i n accordance with Paris Club terms
or better, and Iraq is beginning to approach
these creditors to ask for debt .forgiveness.
The Gulf countries hold the largest amount of
Iraq's non-Paris Club debt, estimated TO be
USS45 billion.
In addition to loans, Iraq owes nearly
USS32billion in war reparations (as of
May 1, 2006). These reparationsarc the result
of claims against Saddam's regime following
the Gulf War i n 1991. Evety year, 5% of
Iraq's oil revenue goes to repayment o f war
reparations. As of May 2006, Iraq had paid
more than US$20 billion in reparations. The
United Nations Compensation Commission,
which oversees the payment o f reparations,
awarded USS21.5 billion in compensationto
oil companies, which lost profits and equip-
ment during the Gulf War. Paying these
reparations each year, while simultaneously
attempting to rebuild its economy, places a
significant strain on Iraq's limited resources.
The economic institutions o f the new Iraqi
government are still developing. On July 12,
Prime Minister al-Maliki outlined his vision
for economic reform to build a prosperous
Iraq based on private sector activity and
investment, economic diversification, and
integration into the global economy. The
Coalition is working with the Government of
Iraq to appoint an Ambassador to the World
Trade Organization (WTO) and to complete
the necessary documentation to hold its first
WTO Working Party. I n addition, the United
States continues to work with the Ministry of
Finance to implement a Financial Manage-
NT TIMES
ment Information System (FMIS) that will
provide greater transparency and account-
ability i n the government's budget and expen-
diture processes.
As o f July 1, 2006, halfway through Iraq's
fiscal year, the Government o f Iraq's minis-
tries have spent far below their planned capi-
tal budget expenditures. Iraq's new ministries
do not have experience executing ministerial
budgets, and lack of a modern electronic
transfer system, which has hampered trans-
ferring funds in locations around the country,
compounded by security problems, contrib-
utes to an under-expenditure. The Govern-
ment of Iraq's continued inability to execute
Its budget places delivery o f basic services, as
well as future economic expansion, at risk,
and demonstrates the need for continuedjoint
U.S.-Iraqi capacity development efforts.
IRMO will soon develop contracts to install
government-wide budgeting and procurement
modules to add to the FMIS, which was
installed approximately two years ago;
however, the Government o f Iraq is Just now
starting to use this system. These new
modules w i l l increase the transparency o f the
financial system and will imnrove the
effectiveness o f in-year and 'forecasted
budgeting. I t is proposed that the Minister of
Finance require all Government of Iraq
financial transactions to use this enhanced
FM1S system. Budgets are not effectively
delegated from the Ministry o f Finmnce
(MOF)to other ministries and provinces. The
procedures to enable contracts through the
MOF are mavine too cumbersome. and offi-
cials are not willing to risk applying perceived
incorrect p~occd-ires," as several officials
hate been dcta.ncd with investigations pend-
ing into possible breaches o f regulations.
Communications benveen the CB1 and the
MOF have all but stopped; several employees
at the CBI have been intimidated and have
therefore failed to show up for work,

The United States is working with the Gov-
ernment of Iraq to engage Iraq's neighbors
and the international community on the future
of Iraq and the stability of the region. A
sustained dialogue with key international
partners remains a critical element in assisting
Iraq's nascent democracy. In this context, last
month Prime Minister al-Maliki traveled to
Saudi Arabia, Kuwait, and the United Arab
Emirates to promote his national reconcilia-
tion plan and to encourage international sup-
port for Iraq.
In late July, the Government of Iraq aid the
UN, with the strong support of the United
States, the United Kingdom, and other donor
states and international financial institutions,
launched an International Compact with Iraq.
.
The International Cnmoact will.. WET the next
five years. bring tugether the international
community and m~ltilateralorganirations to
help Iraq achieve its national vision The go\-
emment's vision is that, five years from now,
Iraq will be a united, federal, and democratic
country, at peace with its neighbors and itself,
well on its wav to sustainable economic self-
sufficiency and prosperity, and well inte-
grated in its region and the world.
The International Compact wilt provide assis-
tance to Iraq under a contractual agreement;
Iraq will undertake specific economic and
wlitical reforms desiened to brine it into the
global economy. In return, international
donors will .ncrease their financial support for
Iraq's reconstruction Meanwhile, the Gov-
crnment of Iraq will continue to enact politi*
cal and security measures to achieve national
i l i a t i o n and to build an economic envi-
mment condncive to sustai~ed econmnic
HY TIMES
growth. The UN now occupies its compound
in Irbil, and a UN Liaison Detachment has
been established in Kirkuk.
The Arab League issued a strong statement
following its November 2005 "Preparatory
Meeting for the National Accord Confer-
ence," calling for all Iraqi panics and Arab
states to support Iraq and respect the political
will of the Iraqi people. The United States
welcomes the planned Arab League-sport-
sored Iraqi National Accord Conference (TO
be scheduled) as an opportunity for Iraqis
inside and outside of government to discuss
the many crucial issues facing their country
and to support a process of national rcconcili-
mion. Since the November 2005 conference,
the Arab League has opened its office in
Baghdad and has appointed Mukhtar Lamani
as its envoy.
MflcroecommicIndicators
Economic indicators are collected and pub-
lished regularly, largely through the Iraqi
Ministry of Planning and Development Coop-
eration and International organizations, such
as the World Bank. the UN, and the IMF.
although gathering accurate statistics on
which to base such indicators in the present
security situation in Iraq is a challenge. As
outlined in the table below, projections from
the IMF assume that economic growth over
the medium term will remain dependent on
the performance of the oil sector, as it
accounts for more than two-thirds of Iraq's
GDP. The outlook also assumes that the
Government of Iraq's investment in the oil
sector will generate increased oil production
and strong GDP growth over the medium
term.
 GDP Ettlmatet and Projections, 20042008
Nombul ODP OR USD billion)
OwrnnwntORh~~~(In%ofODP)
Estimates o f unemployment i n Iraq vary
widely. The UN World Food Program's 2005
estimate is 13.4%. other estimates are as high
as 50%-60%. As of July 2006, the Govern-
ment of Iraq Central Organization for Statis-
tics and Information Technology (COSIT)
estimated that unemployment was 18% and
underemployment was 34%. The COSIT
estimates were corroboratedby a 2005 United
State;. Agency for International Development
(USAID) survey and recent nationwide
polling. This year, the Government o f Iraq
budgeted to increase employment from
I I million TO 1.9 million civi servants. Stale-
owned cnierpriaes arc cxpecxd to add another
100.000 .~conle
. 10 their ro.ls. AlIhoueh this
hiring will reduce unemployment, govern-
ment and state-owned-enterprise employment
is not a long-term panacea; for example, most
state-owned enterprises are operating under
capacity or are closed. The key to long-term,
sustained reduction in unemployment can be
achieved only through private sector-led
growth. The U.S. Government is working
with the Government o f Iraa to devclon the
Iraqi private sector b> reforming the banking
system. providing micro-cred.t tending and
vocational U'dinin~,and cna'tir.~ Itf~isliilionin
KT TIMES
1
2008. 20MP 2007p ZdOBp
2s7 s
'
3 0 0 '30 730
WS m.4 S4S W4
such areas as privatization and investment to
spur economic growth.
Using data collected in 2004, the UN World
Food Program estimates that 15.4% o f the
surveyed population in Iraq lacks adequate
food. Including both severe and moderate
forms, about 25.9% o f the Iraqi children
examined were stunted in their physical
growth, a symptom o f chronic malnutrition.
The lowest rate observed (14.2%) was in
Sulamaniyah Province, while the highest
(36.5%) was in Salah ad Din Province.
With support from USAID, the Ministries of
Finance. Labor, and Social Affairs hate
developed a more effective social safety net
for Iraq's poorest citizens. This initiative
helps low-income families manage the effects
o f subsidy reform, using needs-adjustedcash
benefits and services that help families raise
themselves above the poverty level. The
social safety net program is an essential step
in reforming national subsidies as required by
the IMF Stand-Bv Arraneement. The Govcrn-
ment of Iraq is still registering eligible house-
ho.ds in a con'.inuing effort to reach those
Iraqis most in need u f w.p. Tu date, the
Government of Iraq has enrolled more than
520,000 people in the social safety net
program.
High inflation is thrcatcnicg Iraq's overall
macroeconomic stability. Inflation continues
lo be volatile, with spikes generally caused by
commodity shortages and seasonal variations.
The annual inflation rate from June 2005 to
June 2006 was 52.5%. according to COSIT.
The CB1 needs to take steps to control infla-
tion. Polling data indicate that the Iraqi
public's perceptions of the household finan-
cial situation arc mixed, although public
perceptions are generally more pessimistic
than they were a year ago.
There is evidence that Iraqi private sector
activity continues to expand. The IMF esti-
mates that non-oil GDP growth i n 2006 will
be 10%. Various U.S. Government agencies
are attempting to spur private sector activity
with microfinance loans. bank lendino to
small- and medium-sized enterprises, capital
market devciopmenl, business skills dcvclop-
mcnt, vocational training, investment promo-
tion, business center support, and creation of
economic zones
 Howwould you rate economic conditions in
Iraq today?

HY TIMES
 New B u a l n e s s Regiatratlone (Cumulative)
Sector Indicators
Oil Production. Distribution,
When Coalition forces began Operation Iraqi
Freedom, they entered a country whose
energy infrastructure had deteriorated over
many years. The Coalition set out to help the
Government of Iraq restore oil facilities,
increase production, improve refining of
natural gas production, and maintain pipeline
facilities. Poor maintenance, insurgent
attacks, slow repair, and corruption have
slowed progress. Beyond attacks on various
worksites, terrorists have attacked crude
export and petroleum product pipelines,
impeding exports and the refining and dis-
tribution of petroleum products, such as
gasoline and diesel.
Despite these challenges, crude oil production
for the second quarter improved by 18% to
2.2 mbpd, and exports improved by 20% to
1.6 mbpd. Nevertheless, oil production and
exports still fell short of the Government of
Iraq's goals (2.5 mbpd and 2.0 mbpd, respec-
tively). Due to a combination of increased
exports and higher prices for crude, oil reve-
nues improved in the second quarter, and will
reach budgeted targets by August 2006.
NY TUSKS
. .
Durina the oast Quarter. Iraa resumed exoom
from northern fields for the fim lime since
the autumn cf 20U5, though on a very small
scale. Exports are expected to increase once
three major crude pipelines from Kirtcuk,
including a new 40-inch line, are put in
service in September 2006.
Demand remains essentially unchecked for
state-subsidized refined petroleum products.
The Government of Iraq announced reduc-
tions in fuel subsidies on June 21, 2006, on
July 1,2006, in accordance with the Stand-By
Arrangement, these subsidies started being
phased in at government-run stations. In June
2006, the government increased prices for
fuel soid through official outlets, in accor-
dance with its commitments under its IMF
reform program to decrease fuel subsidies.
Regular gasoline (85 octane) in Iraq is cur-
rently regulated at about US$0.55 per gallon,
while premium gasoline (92 octane) is regu-
lated at about US$0.90 per gallon. The
oremiurn easoline orice is at the IMF tareel
price These prices arc roughly equivalent 10
the pump prices in Kuwait and Saudi Arabit,
but substantially less than in Turkey. wnerc
a s o h n e is heavily taxed This disconnect
between supply and demand leads to black
market activities and corruption. Effons are
 Oil Production
under way to encourage the Government of
Iraq to adopt legislation allowing private
imports of premium fuels at market prices.
This legislation should allow the refined facl
market to clear and help ease the frequent
shortages. It should also help reduce the
rampant crime and corruption associated with
the current fuel production and distribution
process.
The Bayji refinery in northern Iraq is a critical
element in Iraq's national oil infrastructure.
Built in the 1980s. the Bayji refinery is Iraq's
largest and newest refinery. This refinery
typifies many of the challenges Iraq faces as it
attempts to modernize its aging infrastructure
and increase its oil exports. Bayji has a nomi-
nal production capacity of 310,000 barrels per
day. However, since May 2006, the refinery
has not produced more than 170,000 barrels
per day, and recent production has been as
low as 7,500 barrels per day. Four primary
factors have limited production at the Bayji
refinery: maintenance issues with key com-
ponents in the refinery, an inefficient refining
HI TIMES
process, an unreliable flow of crude oil into
the refinery, and security threats to personnel.
Maintaining the refinery's outdated equip-
ment is a challenge. Two of the refinery's
three plants have been shirt down since May
2006 due to mechanical breakdowns, sched-
uled maintenance, power outages, and fires.
One power outage damaged the refinery's
USS20 million hvdrocracker. a critical niece
of equipment used convert heavy fuel oil to
usable products.
A second factor limiting production at Bayji
is inefficiency in its refining process. For
every two barrels of crude oil brought into the
refinery, Bayji produces about one barrel of
usable product, for an efficiency rate of about
50%. modem refineries can have efficiencies
of 90% or higher. The result of the inefficient
refining process is a. large amount of heavy
fuel oil (HFO) byproduct. Bayji docs not have
adequate facilities to refine further, st-, or
dispose of this byproduct; the excess HFO
thus interferes with production and storage of
usable oroducts.
Production at Bayji is also affected by the
interrupted flow of crude oil into the refinery
from Kirkuk through three key pipelines. The
flow has been periodically halted by corro-
sion, fires, mainienance, and attacks, all of
which SeNe to hamper production of refined
products and crude oil for export. Construc-
tion of a new 40-inch line is scheduled to be
completed in September 2006.
ElectricityProduction andDistribution
The electrical generation and distribution
system in Iraq suffers from unscheduled
downtime due to the fragile condition of the
electric grid. sabotage, and poor maintenance
practii;e<. In addition, shortfalls in petroleum
production and distribution lend lo occmmml
fuel shortages for electric generators.
Despite problems, peak capacity and hours of
power continue to improve. During this
reporting period, peak generating output was
5,283 M W on July 17,2006, with an average
peak generating output of 4,573 M W over the
period. This is an improvement of 15.8% over
the previous reporting period. Iraq averaged
14 hours of power per day this quarter, an
improvement of 3 hours per day over the pre-
vious quarter. Baghdad averaged 8 hours of
power per day, twice what it had averaged six
months earlier.
As Iraois .
, nurchase additional electric annli-
ances. demand for electricirv continues ui
increase Estimated demand over the 30day
period ending Jul) 15, 2006. was 8.928 M W
To date in 2006. the highest daily peak supply
was 5,283 MW, 2% below the 2005 pea< of
5,389 MW. With all slate-owned generators
running, theoretical maximum output is
8.551 MW, or 96% of this estimated new
demand. However, that level of output has no*
been achieved, nor could it be sustained if it
were achieved. The Government of Iraq's
goal for average peak generating output by
the end of Dtcember 2006 is 6,000 M W per
day. During times when state-generated elec-
tricity is not available, many Iraqis meet their
electricity requirements through private
 Average Dally Hour of Electrical Power per Province
April-June 2006
generators. Electricity usage in Iraq appears to
be in accordance with or less than regional
norms. Nonetheless, the data suroort the con-
tention that the current connected capacity is
not sufficient to support a growing economy.
The subsidized state distribution rate affects
electricity demand, and current electricity
rates are nominal, well below regional aver-
ages. In addition, not all Iraqis pay for their
state-supplied electricity. About 70% of
homes have meters and are billed. Of those,
about 70% pay their electric bills. The rate
billed is equivalent to US$.002/kwh. Owners
of private neighborhood generators bill their
customers at a rate about 40 times higher,
round US$.O8/kwh.
The communications sector continues to
expand, although this expansion is slowing
down in comparison with its explosive growth
immediately after the fall of the previous
regime. Whereas the number of landline sub-
scribm is relatively stable, the three major
cell phone companies continue to enroll sub-
scribers. IRMO reports that, as of July 25,
2006. there were 7.1 million cellular tele-
phone subscribers and 1 million landline con-
nections. This reflects an increase in cellular
subscribers since the last report. The number
of cellular telephone subscribers has doubled
over the last nine months. The state-owned
Internet service provider (ISP) currently
serves 197,310 subscribers, a slight decrease
since May 2006. This figure excludes private
ISPs and public Internet cafes. It is unknown
whether expansions of private sector ISPs
drew customers from the state-owned service.
U.S.Government projects continue to support
improved communications among Iraqi min-
istries. Thirty-five of 42 government sites in
Baghdad, the CBI, and two state-owned banks
are now connected via the wireless broadband
network. The U.S. Government continues to
train Iraqi telecommunications engineers on
proper operations and maintenance proce-
dures to maintain and broaden this network.
 Cumulatlva Communications Subscriber Data
New projects have "added capuchy to provide
an estimated 4.2 million people with access lo
potable water-an increase of 1.2 million
people since the May 2006 report-but direct
measurement of water actually delivered to
Iraqis is not available."' Additional projects
currently under way should increase infra-
structure capacity to provide access to clean
water toas many as 5 million more people.
There is significant black market activity in
Iraq, much of it in oil products. Although
crude oil can be sold on the biack market,
refined product requires less handling, can be
sold almost anywhere, and is more difficult to
trace, thereby making it more profitable.
Much of the black market and corruption
activity centers on refined products, such as
gasoline, benzene, LPG, and diesel.
Although the increases in the official orices
have reduced the economic incentive to
smuggle fuel, smuggling fuel for resale inside
Special Inspector General Imq Reconstruction
(SIOIR) report. 30 April 06, http://www slgir.nii1.
MY TIKES
and outside the country remains a serious
issue. Turkey, where high taxes keep gasoline
priced near USS5 a gallon, is a lucrative target
for smugglers. However, a significant portion
of illegal trade results in constraining the
supply of gasoline in Baghdad, giving motor-
ists few alternatives to purchasing black
market fuel at increased prices. Some pipeline
interdictions are due to insureent attacks.
while some are boicned attempts 10 steal fuel
by lapping into a fleeing product line. Other
incidcnti include deliberate acts of sabo'-age
intended to manipulate the fuel supply to spur
increased profits for black marketeers and
corrupt officials.
Black market prices for ftiel vary by refined
fuel type: Benzene typically sells for 3-5
times the government established price, while
LPG has recently been selling for 10-20 times
the official price. This gap between the
official price and the biack market price pro-
vides a strong incentive for corruption. The
U.S. Embassy has engaged the Government
o f Iraq to follow through on their stated com-
mitment to encourage liberalization o f the
retail fuel market through enactment of the
Fuel Import Liberalization Law being con-
sidered by the CoR. This reform will allow
the private sector to import fuel and sell it at
market prices. This step is viewed with con-
troversy in Iraq. Economists predict that
private sector retail vendors of petroleum
products would undercut the illegal market,
thus driving them out of business once the
Government of Iraq passes the import liberal-
ization law.
1.3 The Security Envlronme~t
Defeating the enemy, breaking the cycle of
violence. promotinc reconciliation, and transi-
timing security responsibility to lhe Govem-
men1 of Iraq remain the top goals in the secu-
rity track. To achieve these coals, the United
States, its Coalition partners, and the Govern-
ment of Iraq are focused on objectives that
include:
. neutralizing enemy effectiveness, influ-
ence, and ability to intimidate;
. .
ranidlv reducing sectarian violence and
eliminating death squads;
increasing the capacity of the Govern-
ment of Iraq and its security structures
and forces to provide national security
and public order; and
helping Iraq strengthen rule of law
capabilities in the areas of law enforce-
ment. justice, and the corrections
system.
Indicators of the security environment
include:
composition, strength, and support for
groups that threaten security and stabil-
ity: anti-government and anti-Coalition
forces (the "enemy");
activity, support, and efforts to disband,
disarm, and reintegrate militias;
attack trends (including the number of
.
attacks and their effectiveness);
levels of sectarian violence;
Iraqi public perceptions of security and
. security institutions; and
capabilities of the ISF and Iraqi
institutions.
Information about the ISF is presented later in
this report.
During this reporting period, attacks and
civilian casualties have risen, characterized by
ethno-sectmianattacks and reprisals. Violence
escalated notably in Baghdad, which, as the
political, population, and media center of the
country. is a high-value large! for terrorists.
Violence in Basrah also rose, partly in
response to British actions against the JAM.
The death of terrorist Abu Musab al-Zarqawi
in June was a major success for the Coalition
and the Government of Iraq, but al-Qaeda in
Iran remains able to conduct omations due to
its resilient, semi-autonomous cellular struc-
t u x of summand and con'rol lerr~tnstshave
failed to advance their primary objectives,
which include derailing Iraq's political
process and widening their political support
among the Iraqi people. The Iraqi Army took
the lead in more counter-insurgency opera-
tions and assumed security responsibility in
more areas since the last report. The Iraqi
people continue 10 express confidence in the
Iraqi Army to provide for their security and to
reject al-Qaeda in Iraq's vision of Iraq's
future, but they are increasingly turning to
militias and neighborhood watch groups to
provide security from sectarian violence.
Overall attack levels arc higher than last
auarter. In particular. attacks have increased
in southwestern Dipla Province and in the
cities of Mosul and Kirkuk. Extremisis sci.-k-
ing to stoke ethno-sectarian strife have
increasingly focused their efforts on civilians.
inciting a cycle of retribution killings and
 AI-Qaoda i n Iraq Influence
* ~ h l " q l ~ " . ~ h ~ " . . ~ l " " , ~ " ~
7BS
driving civilian casualties to new highs. Much
of this violence is focused on Baghdad, as
terrorists, insurgents, and illegal armed groups
recognized the political and economic signifi-
cance of the ca~italcitv. As described below.
the ~overnmenio f lraa and the Coalition are
akin# iigniticant steps to reverse tne upward
trend o f à tolcncc in Baghdad
Recent DevelopmentsIn the Secwiq
Environment
Risine sectarian strife defines the ememins--
nal&of tiolcnce i n mid-2006. Since the last
report. the core conflici in Iraq changed into a
struggle between Sunni and Shi'a extremists
seeking to control key areas i n Baghdad,
create or protect sectarian enclaves, divert
economic resources, and impose their own
respective political and religious agendas.
Death squads and terrorists are locked i n
mutually reinforcing cycles o f sectarian strife,
with Sunni and Shi'a extremists each portray-
ing themselves as the defenders of their
NY T U B S
respective sectarian groups. However, the
Sunni Arab insurgence remains potent and
viable, although its visibility has been over-
shadowed by the increase in sectarian
violence.
On June 14, 2006, Iraqi Prime Minister
al-Maliki announced the government's plan to
provide improved security conditions in
Baghdad. Operation Together Forward, or
Amaliya Ma'an ila Al-Amam in Arabic, con-
sists o f increased checkpoints, curfews, and
enforced weapons bans to reduce sectarian
violence in focused areas within Baghdad.
Security forces are also conducting raids
against terrorist cells and death squads. As
part o f this operation, Iraqi police, the Iraqi
Army, and National Police, supponed by
Coalition forces, increased patrols and check-
points i n all areas o f Baghdad, while wnccn-
tratino on areas o f the citv that have witnessed
increases i n violence and sectarian killings.
Security forces also worked to block terrorist
entry into the capital city.
 The confluence of high attack l e v e l s ~ m a n y
(argeting c i v i l i a n s ~ a n dthe increased sec-
tarian violence. combined with the need to
ensure that the Government of Iraq mamtans
mdmentum in political p r o m and counter-
insurgency, made Baghdad sceurit> a decisive
element i n the campaign. Given the com-
plexity o f the security situation in Baghdad.
the Iraqi government planned to execute a d
completeAmaliya Ma'an Ha A/-Amam over a
period of months, not weeks. After the first
month o f Amatiya Ma'an ila Al-Amam, the
operation had arrested but had not reversed
the high attack levels seen in May and June.
The average o f 23.7 attacks per day across
Baghdad's 10 districts was virtually un-
changed from the 23.8 average daily attacks
that occurred the month prior to the operation.
Moreover, the rate o f sectarian-motivated
murders and execution-style killings con-
tinued to rise, primarily i n and around
Baghdad.
I n Juiy, during the prime minister's first visit
to the United Stales. Prime Minister ai-Maliki
and President Bush announced an adlmment
10 the Baghdad Security Plan. One ofthe k q
changes is an increase in security force levels
in the city. Elements o f the Call Forward
Force were brought forward from Kuwait and
other Coalition and Iraqi units were reposi-
Honed from less active areas ofthe country. I n
addition, the Secretary o f Defense extended
the 172nd Strykcr Brigade Combat Team's
deployment in Iraq for up to 120 days.
Because the 172nd was largely successful i n
working with the ISF to improve security in
northern Iraq, i t has been repositioned into
Baghdad.
1 addition to increasing force levels i n
Baghdad, the Coalition and the Government
of Iraq developed and refined tactics, tech-
niques, and procedures designed to reduce the
sectarian killings. A primary focus is elimi-
nating the death squads responsible for the
NT TIMES
predominance o f the execution-style killings
and other minders i n the city. The death
squads have fomented sectarian violence, as
killings prompt further killings o f revenge.
Coalition forces and the ISF are also targeting
the death squads and other illegal armed
groups using checkpoints, patrols. driving
ins, curfews, weapons-law enforcement,
intelligencedriven operations, and other
methods. The ]SF w i l l rely on their training,
experience, and familiarity with Baghdad's
milieu to focus on neighborhoods with the
highest levels o f violence. Coalition forces
remain in a supporting role and will be
employed as requested by Prime Minister
al-Maliki and directed by the MNF-1 com-
manding general.
The two primary objectives o f the security
operations in Baghdad are rapidly reducing
sectarian violence by delegitimizing the
illegally armed groups and establishing the
ISF as the dominant security presence. The
changes described above represent a con-
certed, focused effort by the Coalition and the
Government o f Iraq, By strengthening the
capacity o f the Government o f Iraq and
spurring economic growth i n Baghdad, the
United States will help the Government o f
Iraq succeed in protecting its population and
restoring the confidence o f the Iraqi people in
their future.
Violence i n Baghdad is the most prominent
feature o f the conflict i n Iraq i n this period, as
Sunni and Shi'a extremist death squads
pursue their sectarian agendas. The resulting
violence overwhelmingly targets civilians,
causing segments o f the populace to tolerate
or even endorse extremist actions on their
behalfas an effective means to guarantee their
safety, undermining both the Government o f
Iraq's ability to deliver security and its pursuit
of a reconciliation program. Although
 Baghdad remains the focus for sectarian and
terrorist violence i n Iraq. violence tied m the
Rejectionist insurgency, terrorist intimidation,
political and tribal tensions, and criminality
continue in other regions. Sectarian violence
is gradually spreading north into Diyala
Province and Kirkuk as Sunni. Shi'a, and
" . .
Kurdish zrnuns mmnete few nrovincial
iflnence. Conflict in Anbar Province remains
centered on the Sunm insurgcnc) Ahhough
al-Qaeda in Iraq continues its intimidatmn TO
coerce passive Sunni support, tribes are
pushing back to eject al-Qaeda in Iraq and re-
establish their dominant role. In the southern,
predominantly Shi'a region o f the country,
political and tribal rivalries are a growing
motive behind violence, particularly i n
Basrah, with limited anti-Coalition forces
artacks likely undertaken by rogue Shi'a
militia with Iranian support.
Violence against the Iraqi people and Coali-
tion forces is committed generally by a com-
bination o f both Sunni and Shi'a groups, who
are overwhelmingly Iraqi but with a small yet
significant component of foreign suicide
operatives. Sunni groups include Rejection-
ists-many o f whom were members of, or
associated with, the former r e g i m e a n d
terrorists groups, including al-Qaeda i n Iraq,
Ansar at Sunnah (AS), and other smaller
groups. Shi'a groups include elements o f
militias and illegal armed groups, many o f
whom receive Iranian support. Tlie threat
posed by Shi'a illegal armed groups, filling
perceived and actual security vacuums, is
growing and represents a significant challenge
for the Iraqi government. The appearance and
activity of death squads i s a growing aspect o f
the violence in Iraq. with both Sunni and
Shi'a death squads adding to the violence by
targeting civilians and inciting reprisal. Al-
Qaeda in Iraq and elements of JAM
(nominally under the control of Muqtada
HY TIMES
al-Sadr) are among most prominent groups
engaging in a continuing pattern of attacks
and reprisals against individuals or com-
munities representing the other's sectmian
affiliation. Thus, the violence in Iraq cannot
be categorized as the result of a single
o r e a n k d or unified wmsition or insumencv:
" ,
tbe security situation is currentl) at it- most
complex stale since the initiation ofOperttnun
Iraqi Freedom Similarly, Iraqi or Coalition
security strategies must be tailored for the
different objectives, methods, and support
structures o f each particular threat.
AI-Qaeda i n Iraq and its affiliates in the
Mujahadcen Shura Council consist o f both
foreigners and Iraqis motivated by an
extremist Sunni Islamist ideology, which
rejects the West, attacks moderate Islam, and
seeks to establishan Islamic Caliphate i n Iraq.
AS is another significant, mostly indigenous
terrorist group that objects to al-Qaeda in
Iraq's wanton targeting of Muslim Iraqis.
Foreign fighters continue to enter Iraq and
constitute the majority of those conducting
suicide attacks. Sunni extremists continue
their efforts to force Coalition withdrawal,
perpetuate sectarian violence, and make Iraq
ungovernable as a means o f establishing the
Caliphate. The death o f Abu Musab al-
Zarqawi has dealt a significant blow to al-
Qaeda in Iraq, though the cellular nature of its
robust network allowed decentralized opera-
tions to continue. Since then, ai-Qaeda i n Iraq
has fomented sectarian violence through high-
profile attacks against Shi'a civilians and is
engaged in a cycle of retaliatory violence
involving elements o f JAM. AI-Qaeda in Iraq
recently announced that its "Umar Brigade"
that would begin targeting J A M in retaliation
for death squad activities i n an effort to
portray a l - Q d a in Iraq as a proiector of the
Sunni. Additionally, al-Qaeda in Iraq leader-
ship is increasing convergent with at-Qaeda
 senior leaders on goals and strategy following
Zaqawi's death. The recent statement from
Usama bin Laden on June 30,2006, in which
he addresses the Iraqi "jihadists," frames the
conflict in terms o f attacking those who
support the Government of Iraq. He also
warns Shi'a in "southern Iraq" that they are
not safe, if they continue to support Coalition
operations aeainst Sunni urban centers i n
Anbar Province, This is a clear attempt to
recast alQaeda in iraq as the most effective
defender o f Sunni interests.
Sunni Rejectionists use violence and coercion
in an attempt to force withdrawal o f Coalition
forces, prevent Shi'a economic and territorial
dominance, and reverse Sunni political
marginalization by regaining a privileged or
protected status within a unified Iraq. The
1920s Revolutionary Brigade is the most
prominent o f these Rejectionist groups. Sunni
Rejectionists continue to target Coalition
forces at rates higher than Sunni extremist or
Shi'a militia groups. The bulk of the Rejec-
lionist insurgency w i l l likely continue to
attack Coalition forces while they remain i n
Iraq. Some elements are indicating an interest
in Prime Minister al-Maliki's new reconcilia-
tion effort, while still employing violence
against the Coalition forces and the ISF from
a sense o f honor and as a means to force
meaningful political accommodation. Moder-
ates say they will accept reconciliation
inducements and disarm only after death
squads are eliminated; Shi'a militias are
disarmed, and key security, amnesty, and
political demands are met. Other hard-line
elements o f Rejectionist groups provide pro-
fessional military skills to al-Qaeda i n Iraq
and other extremists to achieve common
tactical objectives. Other Rejectionists,
including some in Anbar and Baghdad, are
weary of al-Qaeda in Iraq's violent intimida-
HY TIMES
tion Tactics and actively oppose al-Qaeda in
Iraq, sometimes mounting their own anti-al-
Qaeda in Iraq attacks and raids.
Death squads are armed group5 that conduct
extra-judicial killings. Death squads are
-
formed from terrorists. militias,. illecal armed
groups, and-in some cases-rogue elements
ofthc lSF Bath Shi'a and Sunni death squads
arc active in Iraq, and arc responsible for the
most significant increases i n sectarian vio-
lence. Death squads predominantly target
civilians, and the increase in death squad
activity isdirectly correlated with the increase
of civilian casualties. Coalition forces and the
ISF arc actively targeting elements that
participate i n death squad activity.
Militias and small, illegally armed groups
operate openly and often with popular
support. This is especially true i n areas where
the Government of Iraq is perceived as unable
to provide effective social and security
services for the population. Militias-whether
a or illegal-provide an element of
protection for select portions o f the populace,
-
usuallv on an ethno-sectarian basis.. resultins
in, overall, a more dangerous environment for
the Iraqi community. Some militias also act as
the security arm o f organizations devoted to
social relief and welfare, lending these armed
groups further legitimacy. Whether operating
within or outside the law, these armed groups
operate separately from formal public safety
strumires. Their continued existence chal-
lenges the legitimacy o f the constitutional
government and provides a conduit for
foreign interference. An effective disanna-
merit, demobilization, and reintegration pro-
gram is essential to meeting near- and long-
term security requirementsfor Iraq,
Although a number of militias and illegal
armed groups have operated in Iraq since
before the liberation. the groups that are
affecting the current security situation the
most are the Badr Organization and JAM.
The Badr Organization is an authorized
militia under the Iraqi Transitional Adminis-
trative Law that pre-dated the present Consti-
tution, and the organization actively partici-
pates in the Iraqi government. The Badr
Organization has not engaged in active vio-
slice against Coalition forces or the Govern-
ment of Iraq; it attacks Sunni targets and in
the past has also confronted JAM in an effort
to prevent its expansion of power and
influence among the Shi'a. The Badr Organ-
ization receives financial and materiel support
from Iran, and individuals from Badr have
been implicated in death squads.
JAM is not a legal militia under Iraqi law,
However, it is well known and supported
popularly in Baghdad and the southern prov-
inces of Iraq, and has achieved a measure of
tolerance from elements of the Government of
Iraq, JAM is closely associated with the
Office of the Martyr Sadr and is nominally
responsive to his direction. Most, but not all,
JAM elements are following Sadr's order not
to engage Coalition forces or the ISF except
in self-defense. Still, violence between JAM,
the Iraqi Army, and to a lesser extent Coali-
tion forces, is frequent. Rogue JAM elements
ire among the main perpetrators of sectarian
. ,.
violence. and JAM members freouentlv nar-
ncipate in death squad actnn cs As described
above. JAM and Badr Organisation members
have periodically attacked one another in the
past and are political rivals, but intra-Shi'a
conflict has taken a back seat to the ongoing
battle of violence and revenge between =I-
Qaeda in Iraq and elements of JAM. Like
Badr, JAM receives logistical support from
Ira".
The Peshmerga arc, technically, not a militia,
but have the status of an authorized armed
force.The Peshmeea maintain security inde-
pendently within and along the borders for the
Kurdish Regional Government, Some el<-
mmts are integrated into the IPS. The
Peshmeea predominantly operate in Kurdish
regions, but have also been employed in the
private security company role outside of
Kurdistan. The Peshmerga do not attack or
oppose Coalition forces or the ISF. In some
cases, Peshmerga provide security for Coali-
tion reconstruction efforts. Over the long
term, however, the perceived dual allegiance
of the Peshmeva is potentially inconsistent
with effective national security and gover-
nance.
Unlike the Kurdish and Shi'a militia groups,
Sunni Arabs do not have formally organized
militias, but rely on neighborhood watches,
Rejectionists, and, increasingly, al-Qaeda in
Iraq. The presence of Peshmerga, Badr
Organization,and JAM individuals in the IPS
and the National Police contributes to Summi
concerns about the potential for persecution
and partisanship. The rise of sectarian attacks
is driving some Sunni and Shi'a civilians in
Baghdad and the mixed-ethnic provinces to
support militias. Such support is likely to con-
tinue in areas where Iraqi institutions and
forces arc perceived as unable to provide
essential services or meet security require-
ments.
Without an apparent political motive, conven-
tional criminal elements are also capitalizing
on the instability in Iraq, although it is
increasingly difficult to distinguish among
activities conduaed by criminal, insurgent,
and terrorist groups, as all are engaged in
kidnappings, extortion, assaults, and other
illegal behavior. In some cases, cvirninal
gangs work with terrorist organizations, with
the former abducting hostages and selling
them to the latter, which can use their captives
for publicity or to obtain ransom The various
groups involved in illicit activity are doing so
to generate revenue, expand their influence,
and facilitate further criminal, terrorist, or
insurgent operations.
Attack Trendsand Violence
For this report, the term "attacks" refers to
specific incidents reported in the Multi-
National Corps-Iraq (MNC-I) Significant
Activities database. It includes known attacks
on Coalition forces, the ISF, the civilian
population, and infrastructure,
In the government establishment period
beginning May 20,2006, the average number
of weekly attacks increased 15% compared to
the previous reporting period. Weekly attack
levels in July 2006 were the highest to date.
Coalition forces continued to attract the
majority (63%) of attacks. However, the ISF
and civilians continued to suffer the majority
Average Weekly Attack! by Time Period
1 Apr 04-11 Aug 06
of casualties. Overall, Iraqi casualties
increased by 51% compared to the previous
quarter. Most attacks targeting Coalition
forces were "stand-offs aattacks, not involving
close-up confrontations between Coalition
forces and insurgents. Such attacks typically
consisted of improvised explosive devices
(IEDs), small arms fire, and indirect fire
weapons. The number of car bombs this
quarter increased to levels last seen in the
summer of 2005. Over the last quarter, czr
bombs were largely centered on Baghdad,
Mosul. Kirkuk, and the Western Euphrates
valley, and primarily targeted civilians or ISF
checkpoints.
Although the overall number of attacks
increased in all categories, the proportion of
those attacks directed against civilians
increased substantially. Nationally, in April
2006, civilians were the target of 11% of
attacks; this increased to 15% in June 2006.
Baghdad showed a more pronounced shift in
the targeting of civilians compared to the
national trend. In Baghdad, civilian targets
comprised 15% of total attacks in April and
 Total Attacks by Province
20 May-4 Aim 06

22%in June. The increase in attacks over the Four of Iraq's 18 provinces (Anbar, Baghdad,
past two quarters reflects heightened sectarian Diyala, and Salah ad Din) continue to expcri-
tension foilowing the Golden Mosque bomb- mcc the majority of attacks. Anbar and
ing and increased death squad activity. Baghdad arc the worst affected provinces,

NT TIMES
 defined, movement toward civil war can be
prevented. The U.S. and Iraqi governmems
are continuing the military, diplomatic, and
political actions needed to prevent a civil war
and bring the situation in Baghdad under
control. Sectarian violence is largely confined
to the communal level. Furthermore. the Iraqi
institutions of the center are holding. Iraqi
leaders must take advantage of the popular
support for democracy, a unified Iraq, and
opposition to violence to form institutions that
take responsibility for Iraq's security.
Sectarian tensions increased over the past
quarter, demonstrated by the increasing
number of executions, kidnappings, attacks on
civilians, and internally displaced persons.
According to an estimate by the United
Nations. 22,977 families-137.862 individu-
a l s ~ h a v ebeen displaced in Iraq since the
February 22, 2006, Samarra Mosque bomb
ing. Sectarian violence is concentrated on the
boundaries of mixed and ethnically dominated
areas of Baghdad and in southwestern Diyala
Province.
According to MNC-I reporting, civilian
casualties increased by approximately 1,000
per month since the previous quarter. Execu-
tions in particular reached new highs in the
month of July. The Baghdad Coroner's Office
MY TIMES
reported 1,600 bodies arrived in June and
more than 1,800 bodies in July, 90% of which
were assessed to be the result of executions.
This is due to increased targeting of civilians
by al-Qaeda in Iraq and the increase in death
squad activity,
Sunni and Shi'a extremists, particularly rogue
JAM elements and al-Qaeda in Iraq, are, as
noted, interlocked in retaliatory violence and
are contesting control of ethnically mixed
a to expand their areas of influence.
Throughout the past quarter, rogue JAM
members continued a campaign of oven
executions and mass kidnappings of Sunni
civilians. At the same time, Sunni extremists
continued to respond by carrying out large-
scale and mass-casualty bombings of Shi'a
gatherings and culturally significant sites.
Attacks on Shi'a by al-Qaeda in Iraq and
other Sunni elements are apparently designed
to inflame sectarian tension, which in turn
generates and results in retaliatory attacks on
Sunni civilians by rogue Shi'a elements.
These rogue Shi'a actions increasingly appear
intent on securing Shi'a enclaves and
establishing control of contested areas o f
Baghdad. Coalition forces and the ISF are
responding by increased targeting of both
Sunni and Shi'adeath squads.
areyou viytoonMwhrtci~~~mftd
Uuf ewiwrmmhtbfÑ out In IneT

Sectarian Incidents

Ultimately, stability and security in Iraq
depend on the support of the Iraqi people. In
general, Iraqis have had an optimistic outlook
on their future and the overall security situa-
tion. However, as time has passed, their
optimism has eroded. The aftermath of the
Golden Mosque bombing and the growing
sectarian violence continue to shape their
perceptions. As sectarian violence increases,
the view of the security situation worsens.
With the view that Baghdad is the key to Iraq,
similar sentiment toward security exists
there.
An indication of support for the Government
of Iraq within the country is the level of con-
fidence that the Iraqi people expressly place
in the ISF Forces, especially when compared
against militias or other illegal armed groups.
Since the previous report, confidence in the
Iraqi Army has remained generally constant,
with the notable exception of Baghdad, where
public confidence improved. Despite the
increase in violence, confidence in the Iraqi
Army rose from 69% to 78%. Despite the
recent violence in Basrah, polling data that
MY TIMES
include the Basrah area indicate increased
confidence in both the police and the Iraqi
Army over the last reporting period. Con-
fidence in militias is mixed, with a risc in
confidence in Baghdad countering an overall
downward confidence trend elsewhere.
The perceptions of the Iraqi population will
slowly respond to visible, effective actions
performed by the IPS. It will take continued
diligence on the part of the Iraqi Police to be
seen as actively patrolling their areas and
arresting individuals for criminal activity.
while paying particular care to avoid the
appearance of sectarianism.
Another indicator is Iraqi use of the
intelligence hotline for providing tips to
authorities about suspicious activity. The
population has continued to demonstrate its
willingness to report such activity and thereby
support the government's efforts against
terrorism. Since mid-March, the number of
tips has increased (see following chart). Con-
tinued timely and effective response of the
IPS to these tips should increase the con-
fidence ofthe population.
 How concerned am you about an increase In
sectarian or ethnic violence In Iraq?

MY TIMES
I SeciltOy In Baghdad..

% Expressing confidant* in __ to improv the situation

In Iraq'
NT TUSKS
KT TUBES
 2. Iraqi Security Forces Training and Performance

The ISF continue to grow in strength and 2.1 Progress in Training and Equipping
capability as indicated by: the Iraqi Security Forces

Force generation continues on schedule this

progress in the training and equipping
of lSF personnel;
assessed capabilities of operational
units; and
progress in assuming responsibility for
security ofareas within Iraq.
. . within the MOD and
Institutional capability
the MOI is an increasingly important indica-
tor of the transition to Iraqi security self-reli-
ance. As the MOD and the MOi continue to
staff, train, and equip forces, increased
emphasis is placed on the development of
institutional capacity to direct, support, and
sustain the ISF.
quarter. More than 14,000 additional Iraqi
soldiers and police have completed initial
training and equipping since May 2006,
bringing the total number of ISF trained and
equipped to 277,600.
More than 92% of authorized Iraqi Amy
banalions are assembled. Train-andquip
efforts remain focused on building combat
support and combat service support forces
providing key enablers to Iraqi combat forces.
When fully established, these units will
provide critical combat enablers, such as
logistics and transportation support, intelli-
gence, surveillance, and reconnaissance. More
than 65% of authorized personnel in the Iraqi
Army support forces have been trained and
equipped. Logistics units and overall logistics
capability continues to improve.

COMCONEhT
Imal5Çe~rttF m M

OW)>TIOUAL
-
Current Smw of Trained and Equipped

~COÈÈOKC -ED'
EQUIPPED
..- ..-
...-.

AIR FORCE -700

MAW -1100
TOTAL -115000
OBJECTIVE 137,60

I? TIMES
 MOD Forces' AÑ-a CipabllKlu

MOI National Polio Forces' w a d Cipablllllm

NT TIMES
 2.2 Progress in Assnming Leadership in
Counter-Insurgency
The ISF arc increasingly taking the lead in
operations and assuming primary respon-
sibility for the security of their nation, as Iraqi
army and police forces demonstrate an
increased capability to plan and execute
counter-insurgency operations. The following
charts depict this progress. As of August 7,
2006, 5 Iraqi Army divisions, 25 brigades,
and 85 battalions, and 2 National Police
battalions assumed lead responsibility for
security in their areas of operation.
In total, there are 106 Iraqi Army combat
battalions and 8 Strategic Infrastructure Bat-
talions (SIBS) conducting operations at vary-
ing levels of assessed capability. Another
three combat battalions are in the process of
forming. In addition, 27 National Police bat-
talions are now operational and active. The
green shaded areas on the maps above depict
areas where Iraqi Army units have assumed
the lead for security responsibility. A unit can
1. . . . . I lmql Army Lead and National Police Laad
NY TIMES
assume the lead once it has been thoroughly
assessed and has demonstrated that it is
capable of planning and executing combat
operations. Although these units lead security
operations, most still require support from
Coalition forces because their logistics, sus-
Minment, and command and control cspabilt-
tics are not fully developed. The Coalition's
primary force development objective to date
has been to produce trained, equipped, and
capable combat units; there has been less
emphasis placed on enablers, including logis-
tics and command and control. Now that more
than two-thirds of the Iraqi Army combat
units are in the lead. the Coalition's focus will
shift more toward helping the Iraqis develop
these enablers, MNF-1 will also continue to
help improve the capacity of the MOD to
organbe, train, equip, sustain, and modernize
its forces, with the goal of eventually elimi-
nating the Iraqi Army's reliance on Coalition
support.
2.3 Ministry of Interior
The objective for the M01, in partnership
with the Ministry of Interior Transition Team
(MOI-TT), is to become a forward-looking
minishy that is effective, efficient, account-
able, representative, appropriately structured
lo deal with the prevailing security conditions,
and staffed by people who are committed to
upholding the rule of law. The MOI forces
consist of the IPS, the National Police, the
border forces, and the Center for Dignitary
Protection.
The MNF-I initiative to develop professional
civil security forces able to assume the lead
for the security of the Iraqi people has been
dubbed the "Year of the Police." The focus is
on creating a force loyal to the people of Iraq
and its Constitution, and committed to
guaranteeing human rights and the rule of
law. This was designated as one of MNC-l's
main efforts in 2006.
Mentoring of civil security forces is con-
ducted by Police Transition Teams (PTTs),
National Police Transition Teams (NPlTs),
Border Transition Teams (BTTs), and
Customs and Border Protection T e a s
(CBPTs). More than 160 PTTs are assisting
the develwment of the IPS. Because of the
large number of police stations dispersed
throughout Iraq. the PTT program has initially
foctied on provincial headquarters, district
headquarters, and Iraqi police stations in key
strategic cities, but will spread to other sta-
tions throughout the country as more stations
achieve a higher level of readiness. To con-
duct their mission, the PTTs travel to their
assigned stations to train, teach. and coach the
Iraqi police and to conduct joint patrols with
their Iraqi counterparts.
The integration of International Police Liaison
Officers (IPLOs) into the PTTs significantly
increased the Coalition farce's ability to
develop the IPS. The IPLOs provide the
civilian police with expertise in all technical
aspects of criminal investigation and police
station management. The deployment of five
additional Miliian Po.icc companies in Jul)
2006 added extra PTTs, enabling the expan-
sion of the program to assess miassist in the
development of the IPS.
Twenty-seven BTTs mentor and enable devel-
opment of border forces. Additionally,
Department of Homeland Security Customs
and Border Patrol Teams (CBPTs) provide
critical mentorship at ports of entry, while
38 National Police Transition Teams (NPTTs)
continue w support the development of the
National Police units. These transition t e a s
are intended to improve the readiness and
capability oftheir MOI partner units
The Coalition Police Assistance Training
Team (CPATT) is on track to meet the goal of
recruiting and training the authorized number
of M01 forces by the end of December 2006.
The force generation of the Department of
Border Enforcement @BE) and the IPS will
occur in November 2006 and December 2006,
respectively. Specialized police units, such as
the Criminal Investigative Division (CID) and
the National Information and Investiaative
Agency (NIIA), will be trained by the end of
2006.
The IPS is composed of patrol, traffic, station,
and highway police assigned throughout
Iraq's 18 provinces. Its mission is to enforce
the law, safeguard the public, and provide
internal security at the local level.
CPATT has trained and equipped approxi-
mutely 113,800 IPS personnel, an increase of
12,600 since the May 2006 report. CPATT
projects that it will have trained and equipped
35,000 IPS hy December 7006. Although the
 force will be manned in the aggregate by the
end of the year, proper distribution is a
challenge. Certain areas have a shortage of
trained officers while additional hiring in
other areas has resulted in an overage in the
force.
As of July 24, 2006. 71,324 police recruits
have received training in the 10-week basic
course. Police officers with prior experience
attend a 3-week course, the Transitional Into-
pation Program (TIP), instead of attending
the full 10-weck basic course. Originally
mended only for police trained during the
Saddam regime, theTIP was expanded in July
to include serving police officers who have
not been trained but who have served on the
force for at least one year. The TIP includes
training on human rights, crime defensive
tactics, democratic policing, first aid, patrol
procedures, firearms (9mm and AK-47). and
anti-terrorism. The Officer Transitional Inte-
gration Proflam (OTIP) course curriculum
includes democratic policing, human rights,
first aid, police ethics, supervision and
leadership, use of force, firearms (9mm and
AK-47), communications and problem-
solving skills, anti-terrorism, patrol proce-
dures, critical for officers, and police investi-
gations. Some 41,051 police officers have
graduated from the TIP and OT1P programs.
The IPS constitutes the majority of MOI
forces in the country. Each month, PTTs
assess the operational readiness of a portion
of the police forces, using the Transition
Readiness Assessments (TRA) process. The
TRA evaluates the police on the core hnc-
tions required for effective law enforcement
and community policing. Shortages of PTTs
has limited observation of the IPS in Anbar,
Babil, Basrah. Tamim, Wasit, Karbala,
Maysan, Ninewah, Qadisiyah, Salah ad Din,
Irbil, Dahuk, and Sulamaniyah provinces.
HY TIKES
However, the recent arrival of five additional
Military Police companies will greatly
increase the ability to assess the IPS.
More than 230,000 MOI employees have
been screened by the Iraqi Police Screening
Service, which checks fingerprints against
Ba'ath Party records and Saddam-era criminal
records. Of these, 5,300 were reported as
possible derogatory matches, and 74 have
been dismissed. There is currently no screen-
ing process to ascertain militia allegiance.
More than 54,000 police candidates have been
screened for literacy by Morris & McDaniel,
73% of whom passed and were allowed to
enter basic training. Currently, no method
exists to m k the success rates of thew or
other police officers.
The IPS is equipped with AK-47s. PKC light
machine guns, Clock pistols, individual body
amor, high frequency radios, small and
medium pick-up trucks, and mid-sized SUVs.
The IPS in Baghdad and the nine other key
cities had been provided with 99% of their
authorized equipment a1 the end of June 2006.
They will have received 100% by mid-August
2006. The IPS in all 18 provinces have been
provided with 66% of their authorized q u i p
ment and will receive 100% of their author-
ized equipment by the end of December 2006.
Leadership in the IPS is the cornerstone for
success. The IPS currently has three leader-
ship courses to develop high-quality leaders.
The First Line Supervisor Course is designed
for company grade officers. The Intermediate-
Level Course is designed for field grade
officers, and the Senior-Level Course is
designed for General Officers. Each course is
 two weeks long. Program topics are designed
for the target audience and include human
rights, discrimination, right to life. code of
conduct, democratic policing, modem polic-
ing, the role of the supervisor, communication
and the supervisor, delegation, change man-
agement, ethics, police corruption, problem
employees, community policing, field training
police leadership, history of management,
modem supervision in today's law enforce-
ment organizations, crime scene management,
1 disorder, records management, budget-
ing, logistics, equipment and facilities man-
agement, group problem solving, mission
values, six-step problem-solving models,
overview of law enforcement planning, strat-
egic planning, motivational theory, and
analyzing employee performance problems. A
plan is in place to develop a more extensive
Intermediate-Level Officers course, slated to
begin in the fall of 2006.
The Officer Education System has been
successful in developing junior leaders loyal
to the Iraqi people. However, certain senior
leaders are products of the former regime and
continue to view leadership as an entitlement,
not a responsibility. As these officers are
identified, they are removed.
Organized into a National Police Head-
quarters, two National Police Divisions, the
1st National Police Mechanized Brigade, and
the Emergency Response Unit (ERU), the
National Police are charged with maintaining
law and order while an effective community
police force is developed.
The National Police Headquarters provides
command and control, staffing, equipping,
training, and sustainment for these National
Police Forces, It also commands the two
training and professional development acad-
emies at Camp Solidarity and Camp Dublin.
BY TIMES
The 1st and 2nd National Police Divisions
reached 99% of equipping and authorized
manning by July 2006 and will continue to
progress through TRA levels, with the com-
pletion of force generation by December
2006.
Unprofessional and, at times, criminal
behavior has been attributed to certain units in
the National Police. This behavior and the
decrease in public confidence in these forces
has been the impetus for a National Police
reform program. Each unit and its leaders will
be assessed by a Joint (Coalition and Iraqi)
committee. Substandard leaders at all levels
will be removed and units will undergo rc-
training.
There are currently approximately 24.300
trained and equipped National Police, an
increase of approximately 1,600 since the last
report. They are trained in Iraqi law, human
eights, the mlà of law, and democratic
policing techniques at the National Police
Academy.
New recruits undergo six intense weeks of
training at the academy in northern Baghdad.
Training includes weapons qualification,
urban patrolling techniques, unarmed combat
apprehension, use of force, human rights and
ethics in policing, introduction to Iraqi law,
vehicle checknoints, and IED characteristics
and recognition,
National Police Oserariom
All National Police battalions are currently
conducting counter-insurgency operations,
with two battalions having security lead for
their areas of responsibility. NPTTs are
embedded at all levels of the National Police
units, down to the battalion level. All National
P i mils work in Combined Operations
Areas (COAs) and partner with Coalition
forces who provide support and advice.
The M01 recruits and vets the National Police
force. Coalition forces provide advisors for
the recruiting process, but neither actively
recruit nor provide lists of names of recruits
to the MOI. A National Police officer is
recruited and provided an academy start date;
upon arrival at the National Police academy,
the candidate is interviewed by a senior staff
officer (either a Colonel or Brigadier
General). If he or she passes the interview, the
officer is admitted lo the academy. The
individual's personnel file is then forwarded
to the MOI. where a vetting team reviews it.
If the officer is certified by the vetting pro-
cess, he or she will be retained and allowed to
complete the academy. If the candidate is dis-
approved, the officer is immediately removed
from the academy.
NoIiowol Police Equipment
The National Police have received 92% of
their authorized equipment and will have
received 96% of their authorized equipment
by the end of November, missing its goal of
100% by a small margin. They will have
received 100% of their authorized equipment
by the end of December. The police are
equipped with small arms, medium machine
guns, and RPGs, and they patrol in light
trucks. The mechanized battalions are
e q u i m d with Armored Security Vehicles and
REVAs, a South African wheeled APC.
RetMrtment of Border Enforcement and
Department of Pam ofEmrv
The DEE and the Department of Ports of
Entry (POE) are collectively charged with
controlling and protecting Iraq's borders.
The DBE has 23,900 trained and equipped
personnel, an increase o f 1,800 since the
~reviousrcoort. The DEE isomanized into
5 regions, 12 brigades, and 38 battalions, and
includes the forces that smff258 border fans.
Three academies, each with a capacity of
approximately 800, train border patrol forces.
The Iraqi Border Patrol Basic Training
Course focuses on an introduction to law
enforcement, human relations. human rights,
weapons qualification, combat life saving,
vehicle searches. Iraqi border law. arrest and
detainee procedures, and small unit patrolling.
DEEmdPa ~ m 1 1 0 ~
The DBE is supported by 27 Coalition Border
Transition Teams (BTTs). The 11-man BTTs
mentor and support the development of the
border units. The B l T members are trained in
various specialties, including logistics and
communications, and provide critical assis-
tance to the border force commanders in the
areas of personnel management, intelligence,
operations, budgeting, equipment account-
ability, and maintenance. Additional BTTs
deployed in early June to support the
development of the POE at critical high-threat
border crossings. In Febmary 2006, MNF-I
supported the accelerated development of the
POE through the deployment of a combined
Border Support Team (BSD, consisting of
customs border protection agents and BTTs.
In March 2006. mosi DBE units reached TRA
Level 3, but remained short of equipment and
key personnel. The DEE and POE are i
higher priority for allocation of critical
equipment; and cross-leveling of personnel
has occurred to raise units to TRA Level 2.
By November 2006. the DEE and POE arc
expected to have 28,360 trained and equipped
personnel.
 There are 14 land POEs, of which 13 are
functional. Efforts continue to improve POE
security. Progress in designation o f POE
standard wanizations, delineation o f respon-
sibilities. and development of detailed
policies and procedures has continued. The
U.S. Department o f Homeland Security, in
coordination with Mufti-National Security
Transition Command-Iraq (MNSTC-I), has
continued its rotation of Customs and Border
Patrol Teams. These border security experts
have had an important impact on the POEs,
particularly along the Syrian border. The
increased emphasis on BTTs and the Customs
and Border Patrol Teams has improved DBE
readiness levels, as the Coalition's expertise
and mentorship affects the Iraqi border forces.
DBE and POE E v v i ~ m w
Organizational equipment includes small and
medium pick-up trucks, mid-size SUVs,
generators, and radios. Personal equipment,
including AK-473, medium machine guns,
and individual body armor, complete the
outfitting of the border forces. The DBE
currently has received 81% of its authorized
equipment. They will have received 97% of
their authorized equipment by the end of
August, just short of the 100% goal for that
date. They will reach the 100% goal one
month later, Iraqi POEs will have received
100% of their equipment by the end
December 2006.
Center for Dienftarv Protection
Training and equipping o f the Center o f
Dignitary Protection (CDP) is complete. The
force o f approximately 600 people has been
prepared to serve as the Protective Security
Details (PSDs) for Iraq's new government
leaders. I t is unknown how many o f these
.. . e dM01. An Irani
~ersonnelremain e m ~ l ~ bv
training team assumed responsibility for
training future PSD personnel in June 2006.
Faciilts Pivleaica Service
I n addition to the regular M O I forces, there
1 estimated 145,000 Facility Protection
Service (FPS) personnel who work directly
for each o f the 27 ministries. These forces act
as security guards at government buildings
and allow the IPS to police the communities.
Thev are mlnimallv trained and eauinned. ,
generally without Coalition oversight, and
,-~-.
lack centralized control. FPS personnel have
not always proven reliable, and some have
been responsible for violent crimes and other
illegal activity. Unfortunately, the FF'S
uniform looks similar to the police uniform,
which causes many Iraqis to confuse the FPS
with the better-trained IPS, undermining the
reputation and credibility o f the IPS. The
Coalition and the Government o f Iraq are
establishing a program o f reform to better
regulate the FPS.
MOI Ca~acituDevelopment
Tie M O I overall TRA remains at
TRA 3-Partly Effective. The MOI Transition
Team is working daily in the MOT, stressing
planning and programming resources. The
new Minister o f Interior, Jawa al-Bulani, is
embracing the need to reform the ministry.
Logistics is the only essential system still
assessed as ineffective. Improvement o f the
logistics system is a focal point for tbe next
90 days. A l l other maior functional areas and
systems are considered pad> effective Over
the next 90 days, emphasis will also be diced
on building a solid framework of plans,
policies, and processes to ensure that the MOI
can manage personnel efficiently, conduct
policing operations effectively, and maintain
and sustain capability.
Mot Loslstics
Logistics capabilities continue to be an area of
significant concern for the IPS, particularly
 with respect to vehicle maintenance. How-
ever, accountability of equipment continues to
improve as verified by reports submitted by
PTTs. CPATTNOI-TT continues 10 provide
logistical support in both an advisory and
financial capacity to assist with sustainment
operations. Recently, a Director General for
Logistics and staff were put in place. A
6-month vehicle maintenance contract for the
National Police and the Baghdad IPS was
agreed upon. Currently, there is a
USS950,OOO vehicle spare pans contract for
MOI forces, mid a US$350,000 vehicle spins
parts contract for the National Police is in
place. The average monthly logistical life
support provided from April through June
was US$20,266,121, for a total of
USS60.798.363 during that timeftarne. Con-
struction of a MOI National Storage and
Maintenance Facility was started in June
2006, with an estimated completion in
December 2006. Currently, we are in the
process of conducting a test case to hand over
an LD1 storage warehouse (one of seven) to
NY TIMES
Iraqi control in August 2006. A plan is being
formulated to hold a National Logistics
Conference in September 2006.
MOI security forces are on track to reach
December 2006 Objective Civil Security
Force equipping goals. The following graph
depicts the equipping status and key shortfalls
of Baghdad and the 9 other key cities,
18 provinces, the National Police, the DBE,
and the POEs. Equipment-issue priorities
focused on equipping Baghdad, the 9 key
cities, and the National Police, while
simultaneously building initial functionality
in the provinces, borders, and ports of entry.
In general, these goals were met. However,
the MOI doe not currently have an effective
equipment management system in place. As a
result, it is unknown what percentage of the
equipment issued to the MOI is still service-
able.
The equipping effort did experience
unforeseen delays.
Large shipments of Russian weapons
were delayed clearing customs while
exiting Russia and entering Iraq.
Clock p i s o l delivery delays occurred
when a U.S. manufacturer challenged
the award o f the pistol contract to a
non-U.S. comnanv.
~ o m m u n i c a t i o n s bwas delayed due
to shipping problems,
A l l matters have now been resolved and items
have either arrived or arc inbound. A l l equip-
ment fielding goals are on track to be met by
December 2006.
The MOI docs not currently have an effective
personnel management system. As a result, i t
is unknown how many o f the forces trained
by CPATT are still employed by the MOI, or
what percentage ofthe 146,000 police thought
to be on the M O I payroll are CPATT trained
and equipped. CPATT estimates attrition to
be at least 20% per year going forwad. The
M O I reports paying death benefits for more
than 6,000 police officerssince the fall o f the
Ba'athist regime in May 2003.
In addition to the overall number of police in
Iraq, there are some issues with distribution o f
the police among the various provinces. For
example, by the end of the year, Diyala
Province will have recruited its authorized
force, but w i l l not have trained the entire
authorized number. I n the case o f Diyala, the
provincial leadership has resisted sending
100% of the force to training due to security
concerns and the reluctance to take its police
off the streets. Anbar, Basrah, and Ninewah
may also miss their training targets far the
same reason. Rather than let training seats go
unfilled, other provinces were permitted to
send some of their untrained neraonnel to
training. As a result, those provinces wII have
more than the aut-iorized force trained in their
provinces.
 As with the IPS, the National Police payroll Is
significantly larger than its authorized end-
strength. There are currently more than
29.000 National Police on the M O I payroll,
but it is unknown how many of these have
been trained and equipped. Absenteeism
among National Police units generally follows
the same pattern as i n the military. Leave
policies and immature personnel management
policies account for 30%-40% o f personnel
not present for duty. Absenteeism in the IPS
is difficult to quantify because shift schedules
preclude PTTs from ascertaining which police
officersare absent and which are simply off-
duty.
The DBE oavroll is also lare- than its
authorized end-strength, wnh 25.832 DBE
personnel on the M O I payroll. I t is currently
unknown hon man! untrained DBE personnel
are on the rolls and how many of the trained
and equipped border personnel have left the
MOI. As with the other personnel issues, an
effective personnel management system will
help resolve these reporting and account-
ability deficiencies.
&clanan Issues a1 MOl
The U.S. Government is committed to helping
the Government of Iran create an M O I that
reflects the diversity o f the Iraqi people. The
goal i s to create ethnicall) integrated units at
the national level, while st, I allowing local
police to reflect the ethnic composition of the
communities in which they serve. The former
Police Commandos, now part of the National
Police, arc becoming increasingly diverse.
The former Public Order Battalions. also now
pan o f the National Police, tend to be diipro-
portionately Shi'a, due to a lack o f Sunni par-
ticipation when these units were being formed
1 preparation for the January 2005 elections.
Merging the National Police Commandos and
the Public Order Battalions into one National
Police force has helped produce a more repre-
KT TIMES
sentative National Police. Recruiting initia-
tives targeting Sunnis have improved the
diversity. Unlike the National Police, local
police forces tend to be o f the same ethnic
mix as the communities in which they live
and work.
CorruaHonin MOI
I n 2005, the M O I 10 conducted 790 corrup-
Don-related investiptions. Of these, 472
(60%) were closed. O f the 472 closed
investigations, 118 (25%) were forwarded to
the CPI or to a court for adjudication, 350
(74%) were closed because o f "insufficient
evidence," and 4 (1%) were handled as
internal M O I discipline. To improve the IG's
capability lo investigate, the Specialized
Advance Training Unit at the Baghdad Police
College w i l l train new M O I investigators. I t
w i l l take approximately 18 months to train the
Investigations Directorate at the basic investi-
gator level. Beyond the IG training, improve-
ments in leadership oversight, accountability,
and reductions i n sectarian and militia influ.
dice are required before Iraqis become con-
fident that M O I forces can ensure security and
uphold the ruleof law in Iraq.
Corruption, illegal activity, and sectarian bias
have constrainedprogress i n developing M O I
forces. Inappropriate tolerance o f and infitha-
tion by Shi'a militias, some o f which arc
f l u e n c e d by Iran, is the primary concern o f
the Government o f Iraq. A lack o f effective
leadership and policies to stem corruption
..
throueh accountability for actions. eauioment
and personnel have enabled the theft o f pay
and equipment, unlawful detentions, and
reported cases o f abduction and torture or
execution of Sunnis. The minister is com-
mitted to changing corrupt leaders and insti-
lutingpolicies to eliminate corruption.
 An additional 45 transition teams were
deployed i n July to increase PTT coverage
across the country. As stations begin to reach
TRA Level 2 in August, transition teams will
expand their coverage of nearly 1,000 total
stations across Iraq. This will limit infiltration
by militias, improve adherence to the rule of
law, and prevent complicity and participation
in sectarian violence.
2.4 Ministry of Defense
The Iraqi M O D forces consist o f Army
(including Special Operations Forces), Air
Force, and Navy (including Marines)
personnel. The end state of the Objective
Counter-Insurgency Force will be an approxi-
rnateiy 137,500-person force based around an
Army with 9 infantry divisions and 1 mccha-
nized infantry division consisting of 36 bri-
gades and 112 battalions. Nine Motorized
Transportation Regiments, 5 logistics bat-
talions, 2 support battalions, 5 Regional
Support Units (RSUs), and 91 Garrison
Support Units (GSUs) are intended to provide
I r a q i Army B a t U l l o n a
NOTE- 1c-. w ~ t a ~ m w i l tattdbm
on~
à net Includ*combit.upportfidcombat"wlu.upmi"u"t.
IR.pwitilhǥOdffionD(SMi^eMMTUCJ"H-h.t~~b-
MY TIMES
logistics and support for each division, with
Taji National Depot providing depot-level
maintenance and resupply. Each battalion,
brigade, and division headquarters will be
supported by a Headquarters and Service
Company (HSC) providing logistical and
maintenance SUDBORto its oarent orcaniza-
lion T i e Army will also include 17 SIHs and
a Special Operations Forces Brigade cons~sl.
ing of two special operatioral battalions The
A i r Force will consist of six squadrons, and
the Navy will consist of two squadrons and a
Marine battalion.
The Iraqi Army includes approximately
115,000 trained and equipped combat soldiers
(including SIB personnel and around 9,600
support forces). The capability of Iraqi Army
n i t s continues to improve, facilitated by the
mentoring by embedded advisors at the
battalion, brigade, and division levels, and
partnership with Coalition force units.
In Combat
sna ~ t n t i a l emfmotnicnim ~ n u i ~ obut
i~.
-..,--
 Combat Operations
(Company kvland a8ow.l

Force generation of Iraqi Army units is
increasingly focused on combat enablers and
continues in accordance with the force
development plan. All three planned Iraqi
Training Battalions are formed and fully
operational. These battalions allow the Iraqis
to train soldiers independently in sufficient
quantities for force generation completion and
replacement needs. New recruits attend a
13-week program of instruction. Upon gradu-
ation. soldiers receive additional traininc
specific to net, militarv occipation Depend-
- supply, and maintenance support. Approxi-
ing on their mililan occupational skill as-iign.
ment, the length of training ranges from three
to seven weeks Other traimnz initiatives.
such as the Military Intelligence School, the
Stmal School, the Bomb Disoosal School. the
combat .Ark Branch ~chool,the ~ngi'neer
School, and the Military Police School.
contribute to the growing professionalism of
the Iraqi Army through teaching diverse spe-
cialties necessary to conduct and sustain
counter-insurgency operations.
Three of the nine planned Motorized Trans-
portaiion Regiments (MTRs) are approaching
full operational capability. While a shortfall
of fully competent maintenance personnel
adversely affects full capability, these MTRs
provide improved mobility and sustainment
support for Iraqi forces. Progress has been
made in establishing HSC units for each
combat battalion, brigade, and division to pro-
vide transportation, communications, medical,
mately 80% of the planned HSCs have been
formed; one-third are operational, and the
remaining planned HSCs are scheduled for
completion by December 2006.
Currently, 17 SIBS arc being trained and
equipped. Although the Iraqi Army maintains
operational control of the SIBS. at present
only I SIB is capable of planning and execut-
ing independent operations, and all 17 require
Coalition logistical support. Training of these
battalions continues to employ a 'bin-the-

NX TIMES
 trainer" model that focuses specifically on
squadron- and platoon-level tasks.
The capability of the SIRS is growing as they
receive training and more modem equipment.
MNC-1 is partnering the more capable SIBS
with locally deployed Iraqi Arrny units to
provide them with counter-insurgencyexperi-
cnce and to accelerate their leaders' profes-
sional development. Evaluation of their effec-
tiveness in securing infrastructure, particu-
larly oil pipelines i n northern Iraq, is ongoing.
The Iraqi Armed Service and Supply Institute
(IASSI) at Taji plays a critical role i n training
the officers and non-commissioned officers
(NCOs) to fill support and combat service
support positions i n the Iraqi Army. The
[ASS1 has trained more than 5,000 officers
and NCOs who serve as leaders in the MTRs.
RSUs. and HSCs. The IASSI continues to
support the development of critical Iraqi
Army support and combat support capabili-
ties
S p e c i a l o m Forces
The Iraqi Special Operations Forces (ISOF)
are composed of approximately 1,600 soldiers
organized into the Iraqi Counter-Terrorism
Task Force, the Iraqi Commandos, a support
battalion, and a special reconnaissanceunit.
The Iraqi Navy is tasked with defending
Iraq's coast, territorial waters, vital ports, and
offshore o i l platforms. The Iraqi Navy has
more than 1,100 trained and equipped sailors
and marines organized into an operational
headquarters, two afloat squadrons, and five
Marine companies. The Iraqi Navy is devel-
oping independent capabilities for surface
surveillance, maritime interdiction, o i l ter-
minal protection, and support operations.
HY TIMES
The Iraqi Navy Training Department
continues to develop unit-level refresher
training and naval skills improvements,
e l u d i n g basic seamanship and marttime
security operstions. I n June 2006. the Train-
ing Department independently conducted
basic training and successfully graduated 324
naval recruits. Its training efforts range from
mentorship, as conducted by the Naval
Transition Team, to active skills training, as
conducted by Coalition Navy, Marine, and
Coast Guard Forces.
The Iraqi Air Force continues to evolve
toward supporting the counter-insurgency
force, but progress has been slowed by
difficulty i n recruiting qualified applicants.
There are currently 750 personnel in the Iraqi
A i r Force, with development plans calling for
a concentrated recruitment effort over the
next 18 months to at least double the per-
sonnel by the end o f December 2007. This
effort is intended to provide a satisfactory
corps of professionals as a foundation for
ftiture growth.
The Intelligence Surveillance and Recannais-
sance aircraft at Kirkuk A i r Base (7th Squad-
ron with five CcmtpAir 7SLs) and Basrah Air
Base (70th Squadron with two Seekers and
six CH-2000s) are performing operational
missions. These aircraft are primarily
deployed to patrol oil pipeline infrastructure
i n the north and south, with occasional
missions conducted i n support o f Iraqi Army
units. There have been recent airworthiness
issues with the CompAir 7SL aircraft, and the
Coalition is working with the Iraqi Air Force
to develop solutions and alternatives to
continue supporting the mission.
Helicopter operations from Taji A i r Base i n
central Iraq are still i n their infancy, but the
 next six months should see a marked
improvement The 2nd Squadron is expected
to receive the first 6 o f 16 Huey 11s from a
modification factory in the United States by
the end of January 2007 and the remainder
before April 2007. The 2nd Squadron will
primarily be used for casualty evacuation. I t is
expected to reach initial operational capability
by the third quarter of FY2007.
Three C-130Es from 23rd Squadron at New
Mulhanna Air Base round out the Iraqi Air
Force fleet. Early complications with low
mission capable rates have been solved, and
fleet-wide readiness was measured at 72% in
July 2006. The Iraqi Air Force has requested
an additional three aircraft from the U.S.
Government to bring the fleet total to six.
These additional aircraft reflect the Coalition
Air Force Transition Team's force generation
plan and efforts are under way to identify
additional funding to meet this request.
Assassins MOD CmabiliQ
Embedded Transition Teams continue to pro-
vide monthly TRAs measuring the staffing,
command and control, training, sustainmentl
logistics, equipping, and leadership of their
partnered Iraqi units.
The total number o f M O D military personnel
trained and equipped is currently more than
115,000, approximately 84% of the objective
end-strength.
With the generation of Iraqi Army battalions
more than 92% complete, the focus of the
Iraqi Army's train-and-equip effort shifted
during this reporting period toward building
combat support and combat service support
forces. More than 65% of authorized per-
MY TIMES
sonnel in the Iraqi Army's support forces are
Trained and equipped.
Equipping the Iraqi Armed Forces continues
as planned since the May 2006 report, with
92% of authorized equipment issued to the
101raqi Anny Divisions and subordinate
formations. MNSTC-I is on track to issue all
currently authorized equipment by the end of
December 2006. Equipment is distributed and
filled according to the commander's opera-
tional assessment. MNSTC-I is currently
working with the M O D to transition main-
tenance capabilities to the Iraqi Army. To
date, two Regional Support Units facilities
have been transitionedto the Iraqi Anny.
Leadership
The lack of junior officers and NCOs
continues to be one of the biggest factors
impeding development o f M O D forces. There
is a shortage o f school-trained officers and
NCOs to fill lower-level staffand leadership
oositions. The shortace of leaders will abate
a3 o f i c e r recnuts are comm~~s~onedand t h q
join their un is For WOs, qualified soldiers
are being 'grawn from wthin" through devel-
opment and schooling to achieve promotion
toNCO leadership positions.
The Regional Training Centers (RTCs) and
the NCO Academy focus on junior leader
develwment that is critical to buildinc a
professional force. The RTCs conduct squad
Leader and Platoon Sergeant Courses. Newly
fanned Sereeants Maim and Chief Warrant
Officer Courses have been added to the NCO
Professimai Education System. Specialized
leadership courses, such as Logistics Super-
visor, are being conducted at the Iraqi Army
Service and Suppal Institute at Taji. Three
Iraqi Military Academies at Zahko,
Qalachwaiq and Ar Rustimiyah continue to
train future officers.
 The institutional leadership courses are com-
plemented and reinforced through partnership
with Coalition Military Transition Teams,
These teams, embedded with every Iraqi
battalion, brigade, and division, provide daily
guidance and mentorship. I n addition, Iraqi
uniu are partnered with Coalition force units.
These partnerships, combined with the
expertise and leadership taught through the
institutional base, are critical for deveionment
of both unit proficiency and leadership essen-
tial to increased operational effectiveness.
The importance of ethics, human rights, and
leadership in the Iraqi Armed Forces has
engendered a concept for a Center for Ethics
and Leadership to provide institutional over-
sight for ethics education, training, and
assessment
A promising trend is that military leadership
has become more involved with civic leaders
and sheiks i n their areas o f operation. This
activity will continue to reinforce and
establish the importance o f Iraqis leading and
taking responsibility for their own security
and interests
The new Minister o f Defense, Abd a ! - W r
Muhammad Jassim aI-Mufraji, is confronting
the challenges he faces and is already making
his mark. Previous logjams i n acquisitions
and contracting are being eased, and he is
working closely with MNSTC-1 to proceed on
for= development, force expansion, and
logistics support. The MOD Transition Team
grew to meet this accelerated pace of business
and expanded to more than 50, half o f whom
are Military Professional Resources Incor-
porated contractors. Close and effective
relationships are being forged by team
members with all senior M O D headquarters
officials, and the confidence, and thus
capacity, o f these officials is strengthening.
The ministries and the Joint Headquarters a
expected to be in the lead with Coalition
support by the end of 2007, However, a
partnership with these institutions will be

Force Generation Tlmeline

M~nWgand
Tninlng

Uumbwto be T n l i r d h aWf
.Tatel OUtettir Civil Sfunty Forf f n d of 2006

HY TIMES
 required through at least the first peaceful
transfer of power in 2010.
MNC-I continues to provide logistical support
to the Iraqi Armed Forces where the estab-
lished system falls short. Although there has
been some success with Iraqi &my units
using their own processes, there is still a great
deal of institutional development remaining.
MNF-I is working with both MNC-I and
MNSTC-I to aid the Government of Iraq in
developing a defense logistics system, but in
the absence of a self-reliant system, MNF-I
must provide extensive support to Iraqi
forces.
MNSTC-I processed life support contracts in
a total amount of approximately US$7.8 mil-
lion for the months of May and June 2006.
Currently, all life support conlracts have been
transitioned to the MOD. MNSTC-I has
formed a Transition Working Group tasked
NT TIMES
with ensuring that the MOD properly supports
ill Iraqi Army life support requirements.
DOD requested USS151 million for MOI
sustuinment in the FY2007 Budget Amend-
ment request, but did not ask for funding for
MOD sustainmerit.
Coalition forces are also supporting the
Government of Irao with fuel. In June 2006.
all Iraqi Army uni&submitted requisitions for
fuel; MTRs provide the majority of the fuel
distribution. Storage capacity wilt not be fully
fielded until December. Additionally, the
GSUs will not be fully on-line until March
2007. Until the MTRs and GSUs arc in place,
the Iraqi Army units will not be fully self-
sufficient in terms of bulk fuel transportation
and storage,
Coalition forces supported the Iraqi Army
n i t s with the combined fuel report listed
below.
 Obstacles to Progress
Absenteeism
In the Inmi Army, approximately 15%
attrition is the norm for initial training. When
aunit is fully trained and employed in combat
operations, some soldiers find that they do not
like the particular location or they cannot
cope with dangers of the counter-insurgency.
Absent-without-leave rates are typically about
1%-4% for most Iraqi Army divisions,
although deployments to combat sometimes
cause absentee spikes of 5%-8%. However,
soldiers in units in this final stage of develop-
mem are less likely to abandon the service. As
with any organization, the units with strong,
competent leaders tend to have higher
present-forduty rates than those with weak
leaders. However, there is currently no judi-
cial punishment system within the Iraqi
Army. Therefore, Iraqi Army commanders
have little legal leverage to compel their
soldiers to combat, and soldiers and police
can quit with impunity.
The U.S. Government is committed to crem-
ing an Iraqi military that reflects the ethnic
and religious fabric of Iraq, with diverse units
loyal to the nation and not sectarian interests.
Although competence and merit are the
deciding factors when selecting recruits,
particularly leaders, the ISF are developing so
that they generally mirror the demographic
make-up of Iraq. Sectarian lines remain
drawn, however, along geographic lines, with
Sunni, Shi'a, or Kurdish soldiers mostly
s i n g in units located in geographic areas
familiar to their group. These divisions are
even stronger at the battalion level, where
HY TIMES
battalion commanders of one particular group
lend to command only soldiers of their own
sectarian or regional backgrounds. The
Minister of Defense, through an Officer
Selection Committee, has used the normal
transitions to cominue to diversify the senior
leadership in the Iraqi Army. This continuing
process strives to ensure that the Iraqi Army
is led by competent leaders who are repre-
sentative of the national fabric. In the
aggregate, Sunni, Kurd, and Shi'a are well
and appropriately represented in senior
leadership positions. The Sunni and Kurds are
slightly over-represented, while the Shi'a arc
slightly under-represented, though Shi'a
commanders still hold a large majority of
command positions. The percentage of Sunni
leaders at each level remains constant. At the
battalion level, the echelon in which the Shi'a
have the highest percentage of commands,
they are appropriately represented when com-
pared to the demographics of the Iraqi
population. The relatively high percentage of
Sunni and Kurds in higher-level commands is
a result of the requirement for experienced
military leaders, of which few were Shi'a.
Generally, Shi'a and Kurds were excluded
from higher-level positions in the former
regime. The Kurds, however, benefited from
years of experience in the P e s h m w .
Nationally recruited Iraqi Army divisions are
otherwise representative of the ethno-
religious composition of the country. The
even-numbered divisions were originally
formed as National Guard units, with the
intent that these units would serve in the
respective local regions. The composition of
these units tends to be representative of the
region in which they serve. Over time,
replacements from the national recruiting pool
1 1 increase the diversity ofthesedivisions.
 3. Transition
3.1 Transilionlng Security Responsibility
Process for Imslementiiie Provincial Iran1
-
contra1
The transfer of security responsibility from
Coalition forces to the Government of Iraq is
an obiective of the securitv back outlined
~ - in
the National Strateev for Victory in h.
Such transfers reflect the capability of the
Government of Iraq to fulfill its sovereign
responsibility in the most fundamental, vital
interest of any staleÑt protect its citizens
and safeguard its territory. As Iraqis take on
more responsibility for security. Coalition
forces will increasingly move to supporting
roles in most areas. This may allow for iuture
personnel reductions or a delay in previously
scheduled deployments. The Coalition's
military posture on the ground will remain
responsive and flexible. As the security situa-
tion evolves, MNF-I will maintain sufficient
forces on the ground to help Iraq consolidate
and secure its gains on many different fronts.
The recent agreement between Prime Minister
al-Maliki and President Bush to increase force
presence in Baghdad is indicative of this
flexibility.
Iraq achieved a historic milestone on July 13,
2006, with the transfer of security respon-
sibility in Muthanna Province from MNF-I to
the Provincial Governor and civilian-con-
trolled Iraqi Police Service. Muthanna is the
first of Iraq's 18 provinces to be designated
for transition to Provincial Iraqi Control,
which represents the successful development
of Iraq's capability to govern and protect
itself as a sovereign and democratic nation.
The joint decision between the Government
of Iraq and MNF-I to hand over security
responsibility is the result ~f Muthaana's
demonstrated ability to take the kad in man-
NY TIMES
aging its own security and governance duties
at the provincial level. The transition decision
also reflects a joint assessment of the overall
threat situation in Muthanna. the capabilities
of the IPS and the Iraqi Army, and the provin-
cial leadership's ability lo coordinate security.
Transition Teams are in place to smooth the
transfer process, and multinational forces
stand ready 10 provide assistance if needed.
Dhi Qar Province appears to be ready to
assume security independence within the next
45 days, and several other provinces should
meet the transition criteria before the end of
the year. The Government of Iraq and the
MNF-1 will continue to transfer security
responsibilities in other provinces as prerequi-
site conditions are met.
In concept, security transition is a four-phased
process.
I. MNF-I and
its Major Subordinate Commands e m b
lish and maintain partnerships across
the entire spectrum of ISF units, from
battalion to ministerial level.
2. Irani Army Lead flALl. Process
during which Iraqi Army units progress
through stages of capability from unit
formation to the ability to conduct
counter-insurgencyoperations.
3. Provincial Irani Control (PIC). Iraqi
v i l authorities satisfy the conditions
required to assume control and to
exercise responsibility for the security
of their respective provinces.
4. Irani Security Self-Reliance. The
Government of Iraq achieves PIC (or a
combination of PIC and IAL) thmugh-
out Iraq, and the government, through
its security ministries, is capable of
planning, conducting, and sustaining
security operations and forces.
These phases are not strictly sequential. For
example, the Iraqi Army does not have to
assume the lead in a province before Coalition
forces may begin transfer of provincial
control. This was the case in Muthanna,
Phase 1 of the security transition concept-
implementing partnerships-is already
complete. As described above, the second
phase, Iraqi Army lead, is well under way in
many provinces. The third phase, establishing
provincial Iraqi control over security, will be
implemented on an area-by-area basis. The
Government of Iraq, jointly with military and
political leadership of the United States and
Coalition partners in Iraq, will assess when
conditions permit handing over security
responsibility for specific areas from Coali-
tion forces to the Iraqi civil authorities. The
Joint Committee to Transfer Security Respon-
sibility (JCTSR) has developed criteria to
guide the transfer of security responsibility.
Recommendations for transfer include an
assessment of conditions in four categories:
I. Threat Assessment
2. ISF Readiness
3. Local Governance Capability
Provincial Security Tnmltion A ~ u s n r n(PSTA)
At of July 2008
4. MNF-1 Ability to Respond Quickly to
Major Threats, if Needed
The recommendation to transfer security
responsibility is based on the specific situa-
tion in any one province or provincial capital
in the context ofthe overall security environ-
ment. The appropriate Multi-National Farce
Division Commander and Provincial Cover.
nor. assisted by representatives of the Iraqi
Ministries of Interior and Defense and U.S.
and United Kingdom Embassies, conduct
monthly assessments of provinces and of
provincial capitals. The JCTSR working
group meets monthly to review the assess-
ments and to present recommendations to the
JCTSR principals regarding which provinces
are ready to be transferred. Once a decision is
madc, the JCTSR working group will provide
oversight of the development of transition
directives, develop a public affairs plan, and
arrange a post-transfer security agreement
between MNF-I forces and provincial
governors. Every transfer will ensure an
effective and successful handover of security
responsibilities. Moreover, the transition and
reduced presence of MNF-I forces will be,
plainly visible to the Iraqi people.
t

In June 2006, MNF-I, in coordination with the
Government of Iraq, conducted a large-scale
release of detainees in support of the newly
formed national unity government The
release served as a visible symbol of the gov-
ernment's commitment to national unity and
reconciliation in the progress toward demo-
cratic governance and the rule of law. MNF-I
released 2.500 low-risk detainees over a
period of three weeks. Coupled with the 500
detainees from the normal Combined Review
and Release Board process, MNF-I had a net
reduction of more than 2,000 detainees in
June. A MNF-I special board reviewed
approximately 6,500 records to identify the
low-risk detainees. Each file was also
reviewed by the MNF-I Deputy Chief of Staff
for Intelligence to consider any additional
intelligence reports. Detainees involved in
violent acts, IED makingJplacement, financ-
ing insurgent operations, identified as key
insurgent leaders, or who have been recap-
tured were not considered for rel-.
Detainee Population - 2003 through 2006
NT TIMES
Trmir#on - fo
awl Deiutnees lo the Guvfrnmeni oflraq
MNT-I has begun training Iraqi guards for a
potential transition of the Coalition detention
facilities anddetainees. Transitioning detainee
operations is a three-phase process.
1. Phase 1 consists of individual and
collective training of Iraqi guards and
leaders, including training alongside
their U.S. counterparts inside the
facilily.
2. Phase 2 consists of the removal of
U.S. guards and establishment of a
U.S. transition icam to supervise Iraqi
Security Forces and to maintain legal
custody of detainees.
3. Phase 3 consists of the final removal
of all U.S. personnel and turnover of
the facilities and legal custody of the
detainees to the Government of Iraq.
The criteria for transfer includes the require-
men! for the Government of Iraq to possess
the legal authority to hold security detainees,
each facility demonstratine the ability to meet
the care and custody standard, and the MOJ
having effective oversight of the program,
MNF-I is currently i n Phase 1. Significant
challenges exist to ultimately meeting these
criteria. The Iraqi Corrections System has not
demonstrated the capacity to effectively
resource and run a major facility, such as
Camp Bucca, Additionally, based on the com-
position o f the guard force, serious questions
remain as to whether they would be able to
maintain the required standards o f care and
custody. The most significant obstacle
m a i m establishing the legal authority to
hold security detainees. There is widespread
opposition inside the Sunni political leader-
ship to providing this authority to the Govcrn-
ment o f Iraq.
3.2 US.Force A d j n i h m H
I n consultation with the military commanders
in Iraq, the Government o f Iraq, and Coalition
partners the Secretary of Defense continues
to advise the President on the appropriate
level of U.S. forces in Iraq and the surround-
ing theater of operations based on current
wnditions. These conditions include, but are
not limited to, key elements o f the MNF-I
Campaign Plan, such as the increasing
responsibility of the 1SF i n counter.
insurgency operations and ownership o f areas
of responsibility and progress i n the political
process.
Arbitrary deadlines or timetables for with-
drawal of Coalition forcesÑdivorce from
conditions i n Iraq and the region-would be a
serious strategic error, as they would suggest
h the terrorists, the Rcjectionists, and the
various illegal armed groups in Iraq that they
can simply wan or stall to win. The absence
o f a specific timetable does not mean that the
Coalition's posture in Iraq is static. On the
wntrary, the Coalition continually reviews
the situation i n Iraq and adjusts its posture
and approaches as conditions evolve and Iraqi
capabilities grow.
As sccurift conditions improve and as the 1SF
becomes mo'e capable o f securing their own
c o r n , Coalition forces will move out o f the
cities, reduce the number of bases from which
they operate, and conduct fewer visible
missions. However, they will remain postured
to assist, including supporting the ISF with
transition teams. Although the Coalition
military presence may become less visible, i t
will remain lethal and decisive, able to
confront the enemy wherever i t may gather
and organize.
The Coalition retains the ability to quickly
reinforce the Iraqi Army as required and to
provide critical enablers as Iraqis develop
their own capabilities. Coalition personnel
levels w i l l increase, if necessary, to defeat the
enemy or to provide additional security for
key events, like the 2005 referendum and
elections. But the goal, over time, is to reduce
Coalition forces as Iraqis continue to assume
more o f the security and civilian respon-
sibilities themselves. This process is already
under way.
The Government o f Iraq has agreed to form a
Joint Committee with MNF-I and the U.S.
and UK Embassies to develop a conditions-
based madmap for the full transition of
security responsibility to the ISF. This road-
map will consist o f recommended conditions
intended to lead to the eventual and gradual
withdrawal of multi-national forces from Iraq.
The Joint Committee for Achieving Iraqi
Security Self-Reliance [JCAISSRI w i l l base
11s madmap on much o f the successful work
that has already gone into developing the
strategy for transition o f security respon-
sibility i n Iraq:
~vemance
The seating o f the new Government o f Iraq's,
based on its Constitution, sets the conditioms
 for continuing progress toward Iraqi security
self-reliance. Toward this end, the govern-
ment's program calls for speeding up plans
for completing the preparation of the ISF;
speeding up the process of transferring
security responsibilities and powers to the
Iraqi Army, police, and security forces; and
cooperation with the multi-national forces in a
wav that will allow the handover of security
responsibilities to the ISF, the completion of
the mission, and the exit of the multi-national
forces.
Efforts to develop the capacity of the 1SF
have been successful. In November 2005, the
Iraqi Army had 4 brigades and 23 battalions
in the lead. As of August 7, 2006, the Iraqi
Army has 6 Division Headquarters,
25 brigades, and 85 battalions that have
assumed responsibility. MOI forces also grew
significantly, from approximately 93,000
trained and equipped members in November
2005 to more than 160,000 today.
ProvincialIrani Controlplan
The Government of Iraq and MNF-I have
already developed a conditions-based frame-
work for the transition of security respon-
sibility from multi-national forces to Iraqi
leadership. As a result of this work, security
responsibility for Muthanna Province transi-
tioned to the provincial governor on July 13,
2006. Security responsibility for as many as
nine of Iraq's provinces could transition to
Government of iraq authority by the end of
2006.
The JCAISSR will comprise the Iraqi Prime
Minister. the Iraqi National Security Advisor
(Chair), the Minister of State for National
Security Affairs, the Ministers of Defense and
Interior, the Director of the Iraqi National
Intelligence Service, the U.S. Ambassador,
MY TIMES
the UK Ambassador, and the Commanding
General and Deputy Commanding General,
MNF-1. This committee will be supported by
a working group of direct subordinates.
Conditions recommended by JCAISSR will,
at a minimum, include consideration of the
threat situation across iraq, security force
readiness, capacity of key security and s u p
porting ministries, and development of the
overall Iraqi national security processes.
MNF-IRtf.Imv Construe
MNF-i will efficiently consolidate its foot-
print in Iraq to reduce its military basing
requirements progressively. The MNF-I
basing strategy is an integral part of the
Campaign Plan. MNF-I uses a conditions-
based process to synchronize basing require-
ments with Coalition force structure and
projected command and control structure.
Several factors are considered when employ-
ing this process, including cost-effective use
of resources, maintaining security presence
where required by the mission and
maintaining only those bases required, transi-
tion of operations to the 1SF as they continue
to assume the lead in security operations, and
other factors. Specifically, MNF-I seeks lo
minimize its presence in major cities while
building the flexibility required to support
other elements in Iraq, including Coalition
partners, PRTs, Transition Teams, Depart-
ment of Stae activities, and other supporting
units and entities. This process will culminate
in lhe transition through Operational and
Strategic Overwatch, which will leverage and
maximize support through a minimum
number of strategically located FOBs and
Convoy Support Centers.
As of August 7, 2006, MNF-I has closed 48
of its 110 FOBs, handing over 31 to ISF,
MODIMOI; and 17 to the Ministry of
Finance. Thirteen more FOBs are scheduled
for closure and handover by January 2007.
 Strateole Communication Plan
5th Stability andsecurity Report to Congress

BockoroundfAnalvsis: Section 9010 of the Departmentof Defense AppropriationsAct 2006 requires the SECDEF to provide a
.
quarterlv report to Conaress that measures the oroaress toward achievinnstability and security, in Iraa. Media attention of the
previoJs report focused on sectanan violence (highattack trends and casualty stats) opinion polls regarding coalition force st^^
n~mbersan0 operat ons. and report data in context of events of the day (increase in US troop levels)

Media focus for this quarter's report will likely focus on discussion of civil war, and the rise in attacks and increased civilianflSF
casualties.

TODLine Messaaes:
We have a wmorehensive and coherent strategy for unity. security and orosDeritv in Iran
-The Iraqi security forces are better equipped, better trained and more experienced than theywere three months ago
This metncs report helps us keep Congress informed, but it is only one aspect of our assessmentfor proaress in Iran
Metncs help us achieve our strategy by focusing efforts on accomplishingactions that support a secure, stable Iraq with a
democratic system supported by all Iraqis and accepted by the international community

Talkina Points;

There is a oualitatvedifference between civil war and sectarian violence, and we are not in a civil war
.The majority of Iraq's provinces remain in relative peace, but ~aghdad,in particular, draws global attention and is the target for
sensational attacks that exaggeratethe impact of terrorists, illegal armed groups, and violent extremists.
-Central institutionssuch as the government and security forcis are functioning, and violence is geographicallydefined, not
p resulting in the mass movement of population,

.-
*This is a decisivetime in Baghdad and it requires decisive Iraqi action with our clear su~port.
In Operation Together Forward, Iraqi sec~rityforces wrth coalition in support are focusing on key neighborhooosin Baghdad
Since mid July. statistics measuring levels of violence have trended down While a positive indication, it is far too early to call this
a wntinuinq trend
Lots of hard wo* rema ns for Coalit~onforces. Iraqi secinty forces, the Iraqi government and the Iraqi people
-The security situation is at its most complex state since OIF began, so the results of the s t e m UP effort will take time
.The Baghdad initiative's initial phases demonstratethat the combinationof security forces, government aclren, and cooperation
of citizens can accomplish a great deal.

-The first truly representativegovernment is in place and dealing with the securii issue.
as of 29 Aug 06 1
 Prime Minister al-Maliki's government and Coalition forces are adapting the Baghdad security plan to meet the changing
conditions on the ground.

1 A mib terrorists and exiremists cvntinue to destroy innocent liie in Iraq, they have not shaken the determination ofthe Iraqi people
to build a free country.
A The wlitical orocess continues
A POII~show ~r'aqis have confidence in their governmentto improve the situation (approximately80% of Baghdad, Kurdish, Mid-
- deal or fair amount of confidence new Iraqi gov't can improve
Euohratesand southern citizens said in June thev. have great
situation m Iraq) (pa)
A While the majority of the population is concerned about in Increase in sectarian violence, their concern that a CT/iIwar might
happen has decreased since March (p40)
A Confidence in the Iraqi Army has stayed stable or increased ( ~ 4 3 )
A Iraqis must choose to end sectarian strife that has potentialto be self-sustaining

A The Iraqi security forces continue to prog~ess

A 5 Iraqi divisions, 25 brigades and 85 Iraqi army battalions are in the lead (32 percent increase since last report)
A More than 84 percent of MOD end-strength have been trained and equipped
1More than 92 percent of authorized Iraqi Army battalions have been generated
 Page 1 of 1

Su- 3 i m a - Day of Itockoring Soulh of the Bonier

1maoo7
BY T U B S
 Page 1 of 1

--
fmm: , a.-;-
Sçn Friday, September 01.2006 10:06 AM
To: Virian, Todd M LtCol OSD PA
subject: agenda and revp
Atttchmwa. Pgmdadoc

hi lcdd.
hem I8 the agenda with rsvm for today's cell iwill have print outs In allison's office by 11'30

SS-
 As of September 1 - 10:05 am.

Conference Call
Retired Military Analysts
FRIDAY,SEPTEMBER 1,2006 TIME:11:45 am. - 1215 p.m.
AGENDA
11:45 am. Welcome and Introduction (GUIDELINES)

ommu mu nit^ Relationsand Public Liaison

11:46 a.m. Overview of Iraq Stability and Security Report

Assistant Secretary of Defense Peter Rodman

Rear Admiral William Sullivan

. Military Analysts

12:15 p.m.
-
Conference Call Concludw (GUIDELINES)
 Confirmed Retired Military Analysts:
Colonel Ken Allaid (USA. ReIiredl MSNBC
Mr. Jed Babbin (USAF, JAG) American Spectator
Dr. James Jay Carafano (LTC, USA, Retired) Heritage Foundation
Lieutenant Colonel Gordon Cucullu WSA. Retired) Fox News
Lieutenant Colonel Rick Francona (USAF,~etired)MSNBC
Bngadicr Generdi David L. Grange (USA, Retired) CNN
Command Scrgcant Maior Steven Grecr (USA, Retired) Fox News
Colonel Jack Jacobs (USA, Retired)
~eutcnantCo.unel Koben L. Maginnas (USA, Retired)
Lieutenant General Thomas M:lncmey (USAP, Retired)
Maior Genera: Donald \it.Shciwd (USAF, Retired)
~ r Wayne
. Simmons (USN, CIA, Retired)

NY TIMES
 From: Gmm- John 1
SMIt: I T 0 1 , 2 0 0 6 8:51AM
To: IV. O A S W A
Subj~t: Re: trip

Thank* f o r a l l . l a it s a f e t o a ~ m tÃh a t wà w i l l r e t u r n t o t h e U.S. Proa Kuwait. I f so i n

i t possible f o r me t o t e m i n t e t h e OSD t r i p i n Kuwait and r e t u r n v i a Amuan assuming --
a l a o t h a t we are buying our own f a r e s . Don't mean t o be a p a i n Dut have some things going
i n the region I mat. to work before Ramadan ~ t a z - t e .
Thanks. John.
..........................
Sent from my BlackBerry Wireless Handheld

Subject: t r i p
Gentlemen,
Thank you £01your patience as we continue t o plan on our next t r i p t o t h e CBNTCOH AOR. we
continue t o move forward on the t r i p and a t t h i s point i t look0 very s o l i d . Me are
planning fox an evening departure on 1 4 September and a r e t u r n d a t e of 19 September. I am
M i n g t o have t h e i t i n e r a r y f i n a l i z e d m d approved i n the next couple of day.. M a m n am
I receive t h a t , I w i l l contact you BO t h a t you can s t a r t booking your f l i g h t s .
I n the meantime, would you please forward me your most current hi07
Please l e t me know i f you have any q u ~ m t i o n sor i f t h e r e i s anything I can do f o r you,
-=m
-Public fairs
Community Relations and Public Liaison
The pentagon
Washington. D.C. 20301

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Measuring Stability and
Security in Iraq
August 2006
Report to Congress
In accordance with the
Deparhnent of Defense Appropriations Act 2006
(Section 9010)
 Table of Contents

Executive Summary I

I. Smbility and k m r i t y in Iraq ...-..-.......--,..",".,---. .-".-.-..-...... 5

1.1 Political tYqre
1.2 EconomicAcli
1.3 The Sccudty En

2. Iraqi Secmrily Forces Training and Performance .-.-........................................... 41

2.1 Progress in Trainingand muipping the Iraqi Security Forces.............................. 41
2.2 Progress in Assuming W m h i p in Counter-Insur~ency .....................................43
2.3 Ministry of Interior ................................................................................................
44
2.4 Ministry of Defense ...............................................................................................
52

3. Transition ............................................................................................ 59
3.1 Tmsitioning Security Responsibility.................. .................................................59
32 US.Force Adjustments....................................... .................................................62
 Executive Summary
This mpon is divided into three zclions. The
first section, "Stability and Security in Iraq:
describes mnds and prugms toward meeting
gwis for poiitical stability, strengthened eco-
mmic activity, and a stable security environ-
men1 in lraq. The second section, "Iraqi Sea-
rity Forces Training and Performance," de-
scribes progms in the trainin& deveiopment,
and readiness o f the Iraqi Security Foms
(ISP), including the fomes o f the Ministry of
Defense [MOD) and the police and paramili-
tary forces of the Ministry of Interior (MOl).
The third section, "Transition," describes the
. .
transfer o f securitv rcs~onsibilhfrom Coati-
twn fi>cct<to the Iraq, govcmmenl, trcldong
prerquls~tewnd#tlonsand ~ r ~ t e rfor
t a asses-
mg the rcadr~cssof provr~ces to a w m e
responsibility for security.
A classified annex lo this mpoti provides dam
concuning security force training and per-
formance and a d d m m possible US, m i l i i
force rotations
The information in this q w r t is made wail-
able with the assistance of m y d q m t m e m
and agencies o f the US. G o v m m e n ~the
US. Embassy in Iraq, Multi-National Force-
lraq (MNF-I), and the Govement of Iraq,
The report complements other repm and
infmation a b u t lraq provided to Congrm
and dws not repla= them. The h m t of this
document is to report on 6x memums of sta-
bilily and security specified in Section 9010.
The President's National Smteev for Victoty
lays out the goals and general frame-
work to achieve security and stability in Iraq.
The goal o f the strategy is tc help the Iraqi
people build a new Iraq with a constitutional
and rcpremtaIive government t M respects
political and human rights and with suficient
xcurity forces both to maintain domestic
oder and to prwent Iraq from hecoming a
safe havcn for t m i s t s . To this end, the
United States is pursuin~m integrated strm-
egy three bread tracks:
Polltkal: Helping the Iraqi p w l e forge
a broadly supported compact for demo.
. watic Eovernmcnt
Emnomic: Assisting the Governmm
o f Iraq in establishing t k foundations
for a sound market economy with the
capacity to deliver essential -ices
Secmriw Contribution to an envimn-
and illegal w e d groups
Fa& uack k integrated with the other hvo,
and success in each affects success in the
others. Security depends, in part, on a dm*
cratic political process, which in turn
dcpmds, in part, on economic oppomniv.
Esonomic pmgress depends on *curing the
Iraqi infmstructum against sabotage and
- .
attack and .umtectine the l n a.i ueoulc
. h m
violence that undermines individual paiiicipa-
tion in economic development and the politi-
cal process
Although t h e M i a & W & e ~ for Victow in
h g is not a detailed plan for achieving v-
citic objectives, consistent with the public
m t m o f that dccumnt, it deiincates nteasw-
able trends along each o f these u&ks to
indicate where programs are f c h i i i n g suc-
cess a d w h m it is necessary to i n c m
effmts or adjust implementation o f the
slzategy.
 M a j o r M l l w t o T~ w m d a D e m o c m t l c Iraq
T l ~ ePmident's strategy also identifies eight
objectives, or piliars, of the integralcd pliti-
-1, economic, and xcurily malegy:
Defeat the temrists and m h a l i z e Ihe
..
insurgency
Transition Iraq to securily self-reliance
Help Iraqis forge a national c m p t for
democratic government
Help Iraq build govmmfflt wpac&y
and provide essential sewices
Help Iraq slrengthen il? m,w m y
Help Iraq swennhen the rule o f !mand
, promote i i v i l rhhts
Increase international w p p m for Iraq
Slrzngthen public u n d ~ ~ d i no gf
Coalition efforts and public isolatim o f
the insurgents
Key iadicaton of progress since the last
wrt am d i m m e d below.
Politleal Proera$. This qml marks Ihe fitst
90 days of the first representativegovernment
in Iraq. The appointments o f the Minis- of
Interior, Defense, and State for National
Secmily Affain, on June 8,2006, marked the
complelicm o f a national unily government.
Within one m m t h of scaling &is government,
Prime Minister Nouri al-Maiiki presented a
" N a l i m l Reconciliation and D i d o p e
Fmject'' to &e Iraqi Cmmcil o f Representa-
tives (CoR). This voject is a b d initiative
aimed at m n c i l i n g pasl inequities; rallying
I m i s around a ~ . r i n .c i ~ol ef eaualiw.
. . devoid
o f secwian aivis~ons; 5 m l y eslahlsh~ngthe
bas15of natio%¶unily \ i n a acmocmtic polit!.
cal process; and c r w i n g the conditions for
Iraq to assume a leading role both i n the
regicm and intmationally. Additionally, Ihe
CoR began iw work in June with an a-1-
emled schedule of sessim. Mosl of the
2 4 C o u ~ c i lCmmin- have formed and
named chairs T h e CoR is m&ing m e pro-
ws~ on key legislation r e q u i d l o implement
Ihe provisions ofthe Iraqi Constitvlion.
 .- The Iraqi m n o m y con-
tinues to show progress, but still needs to
overcome serious challenges. As the Govern-
ment of Iraq was formed just 90 days ago, its
institutions are still forming or are immature
and consequently struggle with many macro-
economic issues. The new government has
aflirmed its commitment to programs sup-
ported by the Stand-By Arrangement with the
International Monetary Fund (IMF) by laking
important and decisive measures, notably
price increases for refined petroleum products
that meet IMF targets. The Executive Board
of the IMF subsequently completed its first
and second reviews of Iraq's performance
under the Stand-By Arrangement on
August 2,2006.
Iraq continues to make progress reducing its
Saddam-era debt. As of July 2006, 17 of 18
Paris Club creditors have signed bilateral
agreements to forgive 80% of Iraq's sover-
eign debt, Russia is the only Paris Club
creditor that has not yet signed a bilateral
agreement with Iraq. It has. however, agreed
in principle on debt relief terms and will
finalize an agreement shortly. Middle Eastern
creditors, which hold the majority of the
present debt, have not signed bilateral debt
reduction agreements.
Average peak electrical generating output
increased 15.8% this quarter to 4,573 mega-
vans (MW) and continued to increase over
the quarter. Iraq averaged 14 hours of power
per day this quarter, an improvement of
3 hours per day over the previous quarter.
Crude oil production for the second quarter
improved 1% to 2.2 million barrels per day
(mbpd). and exports improved by 20%, to
1.6mbpd. Also during this quarter, Iraq
resumed exports from northern fields for the
first time since the autumn of 2005. However,
oil production and exports still fell short of
the Iraqi goals of 2.5 mbpd and 2.0 mhpd.
HY TIMES
respectively. Approximately 90% of the Gov-
ernment of Iraq's revenue comes from oil
exports, and higher prices for Iraqi oil con-
tinue to somewhat offset lower than desired
export volumes.
The Security Environment. Setbacks in the
levels and nature of violence in Iraq affect all
other measures of stability, reconstruction,
and transition. Sectarian tensions increased
over the past quarter, manifested in an
increasing number of execution-style killings,
kidnappings, and attacks on civilians, and
increasing numbers of internally displaced
persons. Sunni and Shi'a extremists, particu-
larly al-Qaeda in Iraq and rogue elements of
Jaysh al Mahdi (JAM), arc increasingly intcr-
locked in retaliatory violence and are con-
testing control of ethnically mixed areas to
expand their existing areas of influence. Con-
cern about civil war within the Iraqi civilian
population and among some defense analysts
has increased in recent months. Conditions
that could lead to civil war exist in Iraq.
Nevertheless, the current violence is not s
civil war, and movement toward civil war can
be prevented, Breaking the cycle of violence
is the most pressing goal of" Coalition and
Iraqi operations.
In the current reporting period the average
number of weekly attacks increased 15% over
the previous reporting period average, and
Iraqi casualties increased by 51% compared
to the previous quarter. Much of this violence
occurred in Baghdad, as terrorists, insurgents,
-
" . recoenized and
and illeeal armed erouns
exoloited the oolitical and economic sienifi-
7
canw of conducting operations in the capital
i,n> However the Cwlu on and the Govern
ment of Iraq continued to make progress this
quarter, improving the security environment
in Fallujah and some parts of northern Iraq.
Although sectarian violence threatens the
effectiveness of the Government of Iraqi,
terrorists have failed to derail Iraq's political
process, or to widen their political support
among the Iraqi people. Polling data continue
to show the confidence of most segments of
the Iraqi people in the Iraqi Army and their
rejection of al-Qaeda's vision of Iraq's future,
Iraai Securizv Forces. MOD and MOI secu-
rity forces continue to increase in size and
capability and are increasingly assuming the
lead combat responsibility from Coalition
forces.
Training, quipping, and fielding security
forces continues. Approximately 277,600
Iraqi soldiers and police have completed ini-
tial training and equipping, an increase of
more than 14,000 in the three months since
the last report. As of August 2006, approxi-
mately 84% of the objective end-strength of
MOD forces have been trained and equipped,
while more than 92% of authorized Iraqi
Army battalions have been generated.
Remaining train-and-equip efforts will focus
on building combat support and combat
service support forces.
More Iraqi units are able to take the lead hi
combat operations against the insurgency and
to assume security lead in their territory. The
number of counter-insurgency operations con-
dueled independently by Iraqi forces as a per-
centage of total combat operations continues
to increase steadily. Approximately one-third
of the company-sized operations in Iraq
during the reporting period were conducted
independently by Iraqi forces.As of August 7,
2006, there were 85 Iraqi Army battalions
(5 divisions, 25 brigades) that have assumed
the lead for counter-insurgency operations, a
35% increase since the last report. All 27
National Police battalions are currently con-
ducting counter-insurgency operations, and
2 National Police battalions have the security
lead for their areas of responsibility.
* Iraq achieved a historic milestone
on July 13, 2006, with the transfer of security
responsibility in Muthanna Province from
MNF-1 to the Provincial Governor and the
civilian-controlled Iraqi Police Service (IPS).
Moreover. since the Mav. r e. w n. MNF-1 has
transferred an additional 10 Forward Operat-
ing Bases (FOBS) to the Government of Iraq.
~orty-eightof 110 FOBS arc now under l r i l
control.
 1. Stabilityand Security in Iraq
1.1 Political Progress
The goal of the political process in Iraq is to
help the Iraqi people forge a broadly sup-
ported national compact for democratic gov-
ernment, thereby isolating enemy elements
from the broader public. The United States is
supporting this effort by:
9 supporting Iraqi leaders in their efforts
to include all Iraqis in the political pro-
cess, through dialogue and inclusive
institutions:
offering advice and technical support
for effective governance;
helping build national institutions that
transcend regional, sectarian, and tribal
lines: and
assisting Iraqis in replacing the corrupt
and centralized Ba'athist system with
effective government bodies at local,
provincial, and national levels.
Measures political progress and
include:
. achievement of political goals set forth
in the Iraqi Constitution, as well as
those in United Nations Security Cow-
cii Resolution 1546 and the Transitional
Administrative Law;
formation of a national unity govem-
ment representative of all Iraqi cam-
rnunities:
participation in the political process by
ill Iraqi communities and evidence that
they view the process as legitimate and
effective;
adherence to rule of law institutions;
and
 expansion of international support.
HY TIMES
With the seating of its constitutional govern-
ment, Iraq, with the support of the Coalition,
completed all the milestones required under
United Nations Security Council Resolu-
tion 1546.
me Wat~ona.S t m e w for V i c t m ~ lays g
out a speafic three-pronged political plan to
assist the Government of Iraq in building a
broadly supported national compact for d e m
cratic governance.The plan seeks to:
'*^Isolate enemy elements from those
who can be won over to the political
process by countering false propaganda
and demonstrating to all Iraqis that
they have a stake in a democratic Iraq;
Â¥ Engage those outside the political
process and invite in those willing to
turn away from violence through ever-
expanding avenues of participation;
and
*^ Build stable, pluralistic, and effective
national institutions that can protect the
interests of ail Iraqis, and facilitate
Iraq's fall integration into the interna-
tionai community."
After successful national elections in Deccm-
her 2005, Iraqis made the commitment to
establish a broad unity government. Rather
than allocating all government positions to the
majority party or coalition, this unity govern-
ment sought to provide fair representation in
the ministries and other government posts
among all major parties that won seats in the
CoR. Consistent with this commitment Prime
Minister al-Valiki announced ard *on CoR
approval for his cabinet, mhicn draws minis-
ters and senior officials from parties rcpre-
senting all regions, sects, and ethnic groups.
The announcement met the constitutionally
mandated deadline. but Prime Minister
ai-Maiiki opted to delay filling the positions
of Minister of Defense, Minister of Interior,
and Minister of State for National Security
Affairs to ensure broad support within the
CoR for these sensitive positions.
On June 8, 2006, after additional negotiations
and compromise, the Prime Minister pre-
m t e d his nominees for the two security
ministries. The CoR approved the appoim-
ments by a majority, confirming Jawad
al-Bulani as Minister of Interior and Abd
al-Qadr Muhammad Jassim al-Mufraji as
Minister of Defense. The CoR also approved
Organizational Structureof t h e Government of Iraq
w d e i t c y council Executive Branch
17
7 1
the appointment of Shirwan al-Waili as Min-
ister of State for National Security Affairs.
The appointment of the Ministers of Interior,
Defense, and State for National Security
Affairs marked the completion of Iraq's first
representative government. The resulting
cabinet is remarkably inclusive. The new gov-
ernment reflects the diversity of the Iraqi
people and, with a freely elected parliament
and a popularly ratified constitution, is a strik-
ing contrast to the oppressive, one-man rule
of Saddam Hussein just three years ago.
Poll data indicates that the majority of Iraqis
have confidence in the new government;
notably, however, confidence levels arc
lowest in mixed and predominantly Sunni
areas, such as Kirkuk and TikritJBaquba.
LegislalW Branch
 How much confidence do you have In the now lmqf
gowmnmntto Improve the sltuatlon in Iraq?.

The Iraqi Constitution, adopted by popular
referendum on October 15, 2005, requires
approximately 55 enabling or implementing
acts, in such significant and broad areas as
judiciary development and economic reform,
to make the Constitution operative. Passing
and enforcing this legislation will be a key
indicator of progress for the new Government
of Iraq,
Additionally, the CoR began its work in June
with an accelerated schedule of sessions.
Most of the Council Committees have been
fanned and have named chairs. The CoR has
made some progress on key legislation,
including p r o p s $ toward new Electoral
Commission legislation, the first step on the
path to provincial elections. However, little
substantive legislation was passed in the
session that ended in July.
The two critical political events facing the
CoR and the Government of Iraq over the
next few months are the constitutional amend-
ment processand provincial elections.

BT TIKES
 Progress Toward a Democratic~ r a q2006
frwri Gomnimmt Formation
The National Reconciliation Process
On June 25, 2006. Prime M.nistcr al-Maliki
presented LO the CoR a "Natiml Reconcilia-
ion and Dialogue Project." a 24-point inilia-
tivc aimed at reconciling past inequities,
rallying Iraqis around a principle of equality
dcvoid ofsccmian divisions.
The National Reconciliation and Dialogue
Project is intended to open dialogue, reduce
sectarian tensions and violence in Iraq, and
increase commitment to the democratic pro-
cess and the new national unity government.
The project will operate on three levels. At
the national level, the High National Commis-
sion of the National Reconciliation and Dla-
loguc Project will be composed of reprcscnta-
lives from a diverse cross-section of political,
religious, ethnic. tribal, and cultural groups
under the leadership of the Minister of Stale
for National Dialogue. The second level will
be provincial subcommittees, and the third
HT TIMES
level will be field committees, which wilt
focus on key components of national rccon-
ciliation and will evaluate progress
As part of the National Reconciliation and
Dialogue Project, a conference of tribal
leaders took place on August 26. 2006. in
Baghdad that resulted in a statement
condemning sectarian violence, and endorsing
the reconciliation plan. In the coming
months, the government will convene a
conference of religious scholars. The govern-
ment is supposed to convene a conference of
political parties to encourage the democratic
process and to solidify support for the
Government of Iraq.
Gowrment Institutions
To achieve unity. security, and prosperity,
Iraq must develop the capacity to deliver gov-
enuncnt services to its citizens at the national,
provincial, and municipal levels. The Govem-
ment of Iraq must transform the country from
 TLST

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Assistance lo Provincial Gmmments
Provincial Reconstruction Teams (PRTs)
work with provincial govmors and elected
councils to improve execution o f provincial
government responsibilities and to increase
citizen participation i n governmental deci-
sion-making processes. The learns we
intended to develop core competencies i n
public administration, finance, budgeting,
planning, and accountabilhy by boosting
government capacity and transparency at the
provincial level. Four US.-led PRTs arc fully
operational: PRT Tamlm (Kirkuk), PRT
Nmewah (Mosul), PRT Babil (Hillah), and
PRT Baghdad. The security situation in some
provinces hampers interaction between the
team and provincial leaders.
fromotins the Rule o f h
Political stability i n Iraq is predicated on die
effective rule o f law i n the country. (Note:
Police and associated instmitions are dis-
cussed in Section 2 o f this report.) Effective
l i e of law in Iraq, as in any country, requires
four conditions to be met: effective taws,
police to enforce them, courts to administer
them, and prisons to incarcerate offenders. If
any one o f these institutions fails, or cannot
w o r t with the others, the Iraqi regime w i l l be
unable to enforce the rule o f law. The United
States, its Coalition partners, and international
aeencies are h e l ~ i n eIraa strcnathen the rule
of law. ~ l t h o u g hth-m have been some posi-
tive developments. d e i q in the formation o f
the Government o f Iraq resulted in a loss of
momentum; rule of law initiatives slowed.
which contributed to the growth o f crime, cm-
ruption, and illegal armed groups.
The Iraqi Constitution sets forth a comprehen-
si\e list o f nghts and freedoms, but additional
legislationi s needed to implement those guar-
antees. The Constitution maintains the inde-
pendence of the judicial branch, but vests
considerable authority i n the CoR to define
the functions o f the courts, raising the risk of
undue influence by political or religious
groups. Iraq's criminal legal framework is not
presently robust enough to adequately address
contemporary criminal activity, such as
organized crime, trafficking, and some tech-
nology-rclatcd crimes. Legal experts from the
U.S. Government are assisting Iraqi legal
scholars in creating a legal system that can
balance the requisites of modem international
law with Iraqi cultural and legal traditions.
The Coalition continues to provide adminis-
trative support as well as technical and legal
assistancei n drafting legislation.
The Coalition has helped the Government of
Iraq improve the judicial system in several
areas, including building or renovating court-
houses. expanding the Central Criminal Court
of Iraq (CCCI), and improving security. The
CCC[, far example, now has 12 panels
operating throughout Iraq. I t processes, on
average, 118 insurgency-related cases each
month. Due to the limited capacity of the
11 panels outside Baghdad, the Baghdad
CCCI is the primary facility for hearing insur-
gency cases.
Poor security for judges and judicial facilities,
an insufficient number o f judges, and an
inadequate court infrastructure undermine
advancements i n the rule o f law in Iraq.
Judges are subject to intimidation and in
many areas are afraid to prosecute insurgents.
The U.S. Government, through the U.S.
Marshals Service, responded by providing
secure housing, personal security details,
courthouse protection, and personal protection
firearms to some members o f the Iraqi
judiciary. In Baghdad, the Coalition has pro-
vided facilities for 22 judges to reside in the
International Zone. Working in conjunction
with MNF-1, the U.S. Marshals Service has
begun training an Iraqi Marshals Service. The
U.S. Department of Justice, alone with the
U.S. Department of State and the U.S. Depart-
ment of Defense, is proceeding with plans for
the renovation and construction of Iraqi
courthouses and other related court facilities,
including witness protection buildings. As of
July 21, 2006, approximately 20 projects to
improve judicial capacity have been com-
pleted, and 13 more are under way. Five addi-
tional projects are planned.
The U.S. Department of Justice estimates that
Iraq needs 1,500 judges, yet only about 740
judges are currently serving. The Iraqi
Ministry of Justice's (MOJ) Judicial Training
Institute has enrolled a new class of 180
students (40 judges and 140 prosecutors) in a
2-year program to train new judges and
prosecutors. When this class graduates in the
fall of 2007, there will still be a significant
shortfall in judges. To help address this need,
the Iraqi Chief Justice recently nominated 200
lawyers to serve as investigative judges. If
these judges Eire confirmed, the number of
judges will rise to 940. By the fall of 2007,
approximately 980 judges will be serving in
Iraq, an increase of 32%, but still well short of
the requirement.
The MOJ is responsible for imprisoning w n -
victed criminals and insurgents in Iraq. MOJ
prisons generally meet international stan-
dards, but are already at maximum capacity.
As a result, many detainees spend time in
MOI or MOD facilities. which generally fall
short of internationally accepted standards. To
address this issue, the U.S. and Iraqi govern-
ments are funding construction of seven new
MOJ prison facilities, one each in Basrah,
Khan Bani Sa'ad, Nasiriyah, Dahuk, and
Baladiyat. and two in Rusafa, Work has
stomed at Khan Bani Sa'ad and Nasirivah
due to problems ~ 8 t theh primary contractor
Bridge contracts have been awarded 10 local
Iraqi contractors to provide site security and
to perform some continuing construction
work. The Gulf Region Division of the U.S.
Army Corps of Engineers anticipates that
contracts will be issued to a new contractor in
September and that both facilities will be
completed in April 2007. Construction at the
two Rusafa facilities has been delayed due to
a title dispute between the Ministers of Justice
and Interior. The title dispute is currently in
litigation in the Iraqi courts. Dahuk, a
1,200-bed facility in the Kurdish region, is
scheduled for completion in February 2007.
Construction at Baladiyat was completed and
the prison facility there has been activated and
is currently in use by the Iraqi Corrections
Services. Upon completion in mid-2007, all
of these facilities will add a combined 4.800
beds. Even with these additions, however,
projections show another 20,000 beds will
ultimately be needed. Thus, the Government
of Iraq must address insufficient bed space,
enactment of custody transfer laws, abuses in
MOI and MOD detention facilities, and the
need for more guards and trained supervisors.
The Government of Iraq also faces the
problem of prisoner-detainees awaiting adju-
dicationlresolution of the charges against
them. The MOI and MOD are believed lo be
detaining between approximately 2,000 and
10,000 people in pre-trial status, many in
crowded, substandard facilities.
Security Internees
In addition to criminal detainees and convicts
held by the Government of Iraq. MNF-I holds
security internees (or detainees) under the
authority of United Nations Security Council
Resolution 1637. As of July 16, 2006, Coali-
tion forces held 12,388 such security internees
outside the Iraqi criminal system. Detainees in
MNF-Icustody are treated in accordance with
 Geneva Convention principles. The U.S. Gov.
ernment has initiated a dialogue with the
Government of Iraq i n an effort to transfer
these internees to Iraqi custody. However,
Iraq currently lacks the legal authority to hold
security internees outside o f the judicial
system. Therefore, neither MNF-l-held
detainees nor MNF-I-nin detention facilities
can presently be transitioned to MOJ control.
-
The Coalition continues to urce the Govern-
-
ment o f Iraq to accept transfer o f security
internees in a way that ensures their humane
treatment. Those detainees who do not pose a
serious threat to the citizenry are released as
promptly as possible. (The detainee release
program is described in more detail later i n
this report.)
The Government o f Iraq has made a public
commitment to eradicate corruption and to
empower anti-corruption institutions. Coali-
tion support for this effort is focused largely
1 the three main anti-corruption institutions
in Iraq: the Board of Supreme Audit (BSA),
the Commission on Public Integrity (CPI),
and the Ministerial Inspectors General (IG).
Both the BSA and CPI have new constitu-
tional status. and the CPI has become the lead
Iraqi anti-conuption agency. The CP1 has
investigated 1,158 cases this year.
The CCCI, which has jurisdiction for public
corruption cases, does not have the capacity
to process all its corruption cases. There are
826 criminal cases pending or under active
prosecution. Over the past 20 months, 56 offi-
cials in Iraq's ministries were cither convicted
or subject to arrest warrants. The fact that
there is a functioning process for investigating
and prosecuting corruption, and that some
corrupt officials are being brought to justice,
is a positive sign. However, the ability o f the
governmentto prosecute corruption cases suc-
cessfully is hampered by the lack of enabling
MY TIMES
legislation, lack of CCCI capacity, and intimi-
dation o f investigatorsand judges.
Since the liberation o f Iraq, there have been
significant successes i n the development of
legitimate political institutions and processes.
The unfolding o f the democratic electoral pro-
cess over the course o f 2005 was a crucial
success. Despite these achievements, how-
ever, the political process has encountered
ob-'itacles.
The nature of violence in Iraq is multifaceted
Illcgall) armed groups that reject the political
process often do so because o f long-standing
grievances, extremist beliefs, tribal afilia-
lions, andlor personal vendettas. No one strat-
egy can address every grievance. A vocal
minority o f Iraqis (e.g., religious extremists)
fundamentally opposes the idea o f a demo-
cratic Iraq. Further, some Iraqis who have
joined the political process are condoning or
maintaining support for violent means as a
source o f political leverage.
The continued violence in some areas. e m -
ciaily in Baghdad, hampers the formationof
legitimate national inst Nttons I n some t o ~ n s
and ncighoortwods. local illegal armed groups
are seen as the primary providers o f security
and basic social and essential services. With
the extended delay i n formation o f the
national government and capable ministries,
these armed groups have become more
entrenched, especially in some primarily
Shi'a sections o f Eastern Baghdad and certain
Sunni neighborhoodsin Western Baghdad.
Security issues (e.g., the attempted kidnap*
ping of a deputy minister and threats to minis-
try personnel who work with Embassy teams)
have made some ministers reluctant to have
 U.S. personnel visit them. This reluctance
hampers coordination between the Coalition
and some ministry personnel. Internal politics
(e.g., political party affiliation) is also an
obstacle to progress in some ministries.
Inexperience
Some Iraqi ministers tend to focus on near-
term performance, rather than on long-tcnn
capacity building. A lack of effective proce-
dures within the ministries, such as policy
development, procurement, and budgeting,
was endemic to the Iraqi government under
Saddam Hussein, and three years is not
enough time to reverse decades of organiza-
tional incapacity. This situation should
improve with time.
Lack of proper "tools," such as information
technology, finance systems, and planning
capabilities, inhibit the governing of complex
issues. The result is that Iraqi planning, budg-
eting, and execution processes are less than
fully effective. IRMO is currently procuring
. -
and deveiooinc these tools. but it will take
tim-"ears rather than monthsÑbefor
Go$cmment of Iraq staff is able to use these
tools fulls and to manage the nmistnes to full
effectiveness.
Foreian Interference
Iran and Syria undermine the Government of
Iraq by providing both active and passive
support to anti-government forces that tend to
fuel ethno-sectarian tensions. The Coalition
and the Government of Iraq have acted to
counter the Iranian and Syrian influence by
tightening security at the borders. However,
the borders are porous, and eliminating the
transfer of illegal material and foreign fighters
into Iraq is a formidable challenge.
WY TIMES
Corruption in the ministries has further ham-
pered their capabilities. Experienced or tal-
ented employees are often purged and
replaced with party elementstcronies as a
result of a spoils system. Many of Iraq's
political factions tend to view government
ministries and their associated budgets as
sources of power, patronage, and funding for
their parties. Ministers without strong party
ties often face significant pressure from the
political factions, and sometimes have little
control over the politically appointed and
connected people serving under them. Still
entrenched in the culture of the former
regime, some mini* personnel are reluctant
to exercise independent initiative or to lake
any bold action to address Iraq's problems of
corruption.
1.2 Eroiiomk Activity
The National Strateav for Victory in Iraq
underscores three objectives in helping the
Iraqis build their economy:
. Building the capacity of Iraqi insiitu-
lions to maintain infrastructure, rejoin
the international economic community,
and improve the general welfare of all
h i s
Reforming Iraq's economy, which has
been hindered by war. dictatorship, and
-
sanctions, so that it can be self-sustain-
ing in the future
Restoring Iraq's neglected infrastructure
so that it can meet an increasing
demand and the needs of a growing
economy
This strategy rounds ON the & h d
Pevelooment Stratem 12005.2007) of the
Government of Iraq, whose national eco-
nomic objectives are:
. Strengthening the foundations of eco-
nomic growth
Revitalizingthe private sector
Improving the quality of life
Strengthening good governance and
security
Buildine the Irani Economy
The formation of a new government allowed
Iraq to refocus on its economic agenda. In the
second quarter, the new government affirmed
its commitment to the refonn program s u p
ported by the Stand-By Arrangement and is
moving forward with implementation of that
program. The new government maintained
fiscal discipline, raised domestic fuel prices to
the targeted levels in the Stand-By Arrange-
ment, sent a fuel import liberalization law to
the CoR, and increased targeted support for
the poor. The Executive Board of the IMF
. . completed
subseauentlv . its first and second
review of Iraq's performance under the Sand-
By Arrangement on Augusi 2,2006.
Although the Government of Iraq missed the
March 2006 deadline for the state fuel-price
increase required by the Stand-By Arrange-
merit for refined petroleum products, on
July 1, 2006, the new Government of Iraq
increased prices (reducing subsidies) for
regular and premium gasoline, benzene, lique-
fied petroleum gas (LPG), kerosene, and
diesel products, thus meeting or exceeding the
IMF Stand-By Arrangement-mandated price
increases.
Inflation threatens the overall macroeconomic
stability that Iraq has maintained since the
WJ ended. Ongoing violence and supply dis-
ruptions are pushing prices higher. The
Central Bank of Iraq (CBI) must further
tighten monetary and exchange rate policy to
prevent high inflation from becoming
entrenched.
Iraq wntinues to make progress reducing its
Sadaam-era deb. Iraq's debt uas estimated at
US1125 billion after thc war. This was almost
five times the gross domestic product (GDP)
in 2004. an unsustainable burden on the Iraai
economy. The historic November 2004 debt
reliefagreement with the Paris Club members
and subsequent agreements with commercial
and other official creditors, as well as some
in-Paris Club creditors, are helping bring
Iraq's debt to sustainable levels.
As of Julv .
, 2006. all 18 Paris Club cred'im
except Russia had signed bilateral agreements
10 forgive 80% of Iraqi sovereign debt w e d
Russia Is expected to sign an agreement with
Iraq soon. In addition, Iraq has completed its
program to restructure commercial claims
from commercial and other official creditors.
m Paris Club - USS41.7 billion owed
before signed bilalerals; USS34.2
billion wili be forgiven under Paris
- Club terms, including a future Russian
agreement.
Non-Paris Club sovereign debt
approximately U S 6 3 billion owed
(US$2.75 billion worth of debt relief
-
agreed to on US3.3 billion worth of
debt, thus far).
Commercial and other official creditors
- debt relief deals completed on
USSi9.7 billion of commercial and
other official debt.
As long as Iraq wntinues its progress on
implementing the economic reforms in the
IMF Stand-By Arrangcmeni, the counlry wili
remain eiieible for the final 20% of debt
reduction agreed under the Pans Club teems.
Sixty percert of the Govemnwnt of Iraq's
debt to Paris Club members has already been
forgiven, and continued successful wmpk-
 lion of the Stand-By Arrangement will qualify
Iraq for a final tranche of 20% in late 2007 or
early 2008. The United States forgave all of
Iraq's debt (USS4.1 billion) and is encouraa-
ing other creditors to follow this example.
Debt relief from non-Paris Club creditors is
expected in accordance with Paris Club terms
or better, and Iraq is beginning to approach
these creditors to ask for debt forgiveness.
The Gulf countries hold the largest amount of
Iraq's non-Paris Club debt, estimated to be
USt45 billion.
In addition to loans, Iraq owes nearly
US$32billion in war reparations (as of
May 1,2006). These reparations are the result
of claims against Saddam's regime following
the Gulf War in 1991. Every year, 5% of
Iraq's oil revenue goes to repayment of war
reparations. As of May 2006, Iraq had paid
more than USS20 billion in reparations. The
United Nations Compensation Commission,
which oversees the payment of reparations,
awarded US$21.5 billion in compensation to
oil companies, which lost profits and equip-
ment during the Gulf War. Paying these
reparations each year, while simultaneously
attempting to rebuild its economy, places a
significant strain on Iraq's limited resources.
The economic institutions of the new Iraqi
government arc still developing. On July 12,
Prime Minister al-Maiiki outlined his vision
for economic reform to build a prosperous
Iraq based on private sector activity and
investment, economic diversification, and
integration into the global economy. The
Coalition is working with the Government of
Iraq to appoint an Ambassador to the World
Trade Organization (WTO) and to complete
the necessary documentation to hold its first
WTO Working Party. In addition, the United
States continues to work with the Ministry of
Finance to implement a Financial Manage-
MY TIMES
ment Information System (FMIS) that will
provide greater transparency and account-
ability in the government's budget and expen-
dimre processes.
As of July 1, 2006, halfway through Iraq's
fiscal year. the Government of Iraq's minis-
tries have spent far below their planned capi-
tal budget expenditures. Iraq's new ministries
do not have experience executing ministerial
budgets, and lack of a modem electronic
transfer system, which has hampered trans-
ferring funds in locations around the country,
compounded by security problems, contrib
utes to an under-expenditure. The Govcm-
men1 of Iraq's continued inability to execute
its budget places delivery of basic services, as
well as ftiture economic expansion, at risk,
and demonstrates the need for continuedjoint
US.-Iraqi capacity development efforts.
IRMO will soon develop contracts to install
government-wide budgeting and procurement
modules to add to the FMIS. which was
installed approximately two years ago;
however. the Government of Iraq is just now
starting to use this system. These new
modules will increase the transparency of the
financial system and will improve the
effectiveness of in-year and forecasted
budgeting. It is proposed that the Minister of
Finance require all Government of Iraq
financial transactions to use this enhanced
FMIS system. Budgets are not effectively
delegated from the Ministry of Finance
(MOF) to other ministries and provinces. The
orocedures to enable contracts throueh the
MOF arc proving too cumbersome, and ofli-
cials are not willing to risk appl)ing perceived
incorrect procedures," as several officials
have been detained with investigations pend-
ing into possible breaches of regulations.
Communications between the CBI and the
MOF have all but stopped; several employees
at the CBI have been intimidated and have
therefore failed to show up for work.

The United States is working with the Gov-
ernment of Iraq to engage Iraq's neighbors
and the international community on the future
of Iraq and the stability of the region. A
sustained dialogue with key international
partners remains a critical element in assisting
Iraq's nascent democracy. In this context, last
month Prime Minister al-Maliki traveled to
Saudi Arabia, Kuwait, and the United Arab
Emirates to promote his national reconcilia-
tion plan and to encourage international sup-
port for Iraq.
In late July, the Government of Iraq and the
UN, with the strong suppon of the United
States, the United Kingdom, and other donor
states and international financial institutions,
launched an International Compact with Iraq.
The International Compact will, over the next
five years, bring together the international
communiw and multilateral oreanizMions to
help Iraq achieve its national vision. Tlic gov-
crnnunt's vision Is thai, five years from now,
Iraq will be a united. !cccraL and democratic
country, at peace with its neighbors and itself,
well on its way to sustainable economic self-
sufficiency and prosperity, and well inte-
grated in its region and the world.
The International Compact will provide assis-
tance to Iraq under a contractual agreement;
Iraq will undertake specific economic and
political reforms designed to bring it into the
global economy. In return, international
donors will increase their financial support for
Iraq's reconstruction. Meanwhile, the Gov-
eminent of Iraq will continue to enact politi-
I and security measures to achieve national
reconciliation and to build an economic mvi-
mnmenr conducive to sustained economic
HY TIMES
growth. The UN now occupies its compound
in Irbil, and a UN Liaison Detachment has
been established in Kirkuk.
The Arab League issued a strong statement
following its November 2005 "Preparatory
Meeting for the National Accord Confer-
ence," calling for all Iraqi parties and Arab
states to support Iraq and respect the political
will of the Iraqi people. The United Stales
welcomes the planned Arab League-spon-
sored Iraqi National Accord Conference (to
be scheduled) as an opportunity for Iraqis
inside and outside of government to discuss
the many crucial issues facing their country
and to support a process of national reconcili-
atbon. Since the November 2005 conference,
the Arab League has opened its office in
Baghdad and has appointed Mukhtar Lamani
as its envoy,
Economic indicators are collected and p u b
lished regularly, largely through the Iraqi
Minisliy ofPlanning and Development Coop-
eration and international organizations, such
as the World Bank, the UN, and the IMF,
although gathering accurate statistics on
which to base such indicators in the present
security situation in Iraq is a challenge. As
outlined in the table below, projections from
the IMF assume that economic growih over
the medium term will remain dependent on
the performance of the oil sector, as it
accounts for more than two-thirds of Iraq's
GDP. The outlook also assumes that the
Government of Iraq's Investment in the oil
sector will generate increased oil production
and strong GDP growth over the medium
tern.
 GDP Estimates and Projactlona, 2004-2008
Estimates of unemployment in Iraq vary
widely. The UN World Food Progm's 2005
estimate is 13.4%. other estimates are as high
as 50%60%, As of July 2006, the Govern-
ment of Iraq Central Organization for Statis-
tics and Information Technology (COSIT)
estimated that unemployment was 18% and
underemployment was 34%. The COSIT
estimates were corroborated by a 2005 United
States Agency for International Development
(USAID) survey and recent nationwide
polling. This year, the Government of Iraq
budgeted to increase employment from
1.1 million to 1.9 million civil servants. State-
owned enterprises are expected to add another
100.000 people 10 their rolls. Although this
hiring will reduce unemployment, govern-
ment and state-owned-enterpriseemployment
is not a long-term panacea; for example, most
state-owned enterprises are operating under
capacity or are closed. The key to long-term,
sustained reduction in unemployment can be
achieved only through private sector-led
~i-owh.The U.S. Government is workine
fith ihc Government of Iraq to develop the
Iraqi private sector by reforming the banking
system, providing micro-crcdtt lending and
vocational training, and enacting legislation in
such anas as privatization and investment to
spur economic growth.
Using dam collected in 2004, the UN World
Food Program estimates that 15.4% of the
surveyed population in Iraq lacks adequate
food. Including both severe and moderate
forms, about 25.9% of the Iraqi children
examined were stunted in their physical
growth, a symptom of chronic malnutrition.
The lowest rate observed (14.2%) was in
Sulamaniyah Province, while the highest
(36.5%) was in Salah ad Din Province.
With support from USAID, the Ministries of
Finance. Labor, and Social Affairs have
developed a more effective social safety net
for Iraq's poorest citizens. This initiative
helps low-income families manage the effects
of subsidy reform, using needs-adjusted cash
benefits and services that help families raise
themselves above the poverty level. The
i a l safety net program is an essential step
1 reforming national subsidies as required by
the IMF Stand-By Arrangement. The Govem-
ment of Iraq is still registering eligible house-
holds in a continuing effort to reach those
Iraqis most in need of help. To date, the
Government of Iraq has enrolled more than
520.000 people in the social safety net
program.
High inflation is threatening Iraq's overall
macrocconomio stability. Inflation continues
to be volatile, with spikes generally caused by
commodity shortages and seasonal variations.
The annual inflation rate from June 2005 to
June 2006 was 52.5%. according to COSIT.
The CB1 needs to take steps to control infla-
tion. Polling data indicate that the Iraqi
public's perceptions of the household finan-
cial situation are mixed, although public
perceptions are -lly more pessimistic
than they were a year ago.
There is evidence that Iraqi private sector
activity continues to expand. The IMF esti-
mates that non-oil GDP growth in 2006 will
be 10%. Various U.S. Government agencies
arc attempting to spur private sector activity
with microfinance loans, bank lendine to
small- and medium-sized enterprises, capital
market development, business skills dcvelop-
m a t , vocational cmlng, investment promo-
tion, business center support, and creation of
economic zones.
 Howwould you rate economic conditions in
Iraq today?

1 Monthly CoiKumar Price Indu <% Change) 1

Sector Indicators
Oil Production. Distribution, andExpor(
When Coalition forces began Operation Iraqi
Freedom, they entered a country who%
energy infrastructure had deteriorated over
many years. The Coalition set out to help the
Government of Iraq restore oil facilities,
increase production, improve refining of
natural gas production, and maintain pipeline
facilities. Poor maintenance, insurgent
attacks, slow repair, and corruption have
slowed progress. Beyond attacks on various
worksites, terrorists have attacked crude
export and petroleum product pipelines,
impeding exports and the refining and dis-
tribution of petroleum products, such as
gasoline and diesel.
Despite these challenges, crude oil production
for the second quarter improved by 18% to
2.2 mbpd, and exports improved by 20% to
1.6 mbpd. Nevertheless, oil production and
exports still fell short of the Government of
Iraq's goals (2.5 mbpd and 2.0 mbpd, respec-
tively). Due to a combination of increased
exports and higher prices for crude, oil reve-
nues improved in the second quarter, and will
reach budgeted targets by August 2006.
During the past quarter, Iraq resumed exports
from northern fields for the first time since
the autumn of 2005, though on a very small
scale. Exports are expected to increase once
three major crude pipelines from Khkuk,
including a new 40-inch line, are put in
service in September2006.
Demand remains essentially unchecked for
state-subsidized refined petroleum products.
The Government of Iraq announced reduc-
tions in fuel subsidies on June 21, 2006: on
July 1,2006, in accordance with the Stand-By
Arrangement, these subsidies started being
phased in at government-run stations. In June
2006, the government increased prices for
fuel sold through official outlets, in accor-
dance with its commitments under its IMF
reform program to decrease fuel subsidies.
Regular gasoline (85 octane) in Iraq is cur-
rently regulaled s about US$0.55 per gallon,
while premium gasoline (92 octane) Is regu-
lated at about US$0.90 per gallon. The
premium gasoline price is at the IMF target
price. These prices are roughly equivalent to
the pump prices in Kuwait and Saudi Arabia,
but substantially less than in Turkey, where
gasoline is heavily taxed. This disconnect
between supply and demand leads to black
market activities and comption. Efforts are
 Oil Production
M a d u n e 20BS
under way to encourage the Government of
Iraq to adopt legislation allowing private
imports of premium fuels at market prices.
This legislation should allow the refined fuel
market to clear and help ease the frequent
shortages. It should also help reduce the
rampant crime and corruption associated with
the current fuel production and distribution
process.
The Bayji refinery in northern Iraq is a critical
element in Iraa's national oil infrasmicture.
Built in the 19805, the Bayji refinery is Iraq's
largest and newest refmen. This refmen
typifies man) of the challenges Iraq faces as it
attempts to modernize its aging infrastrocture
and increase its oil exports. Bayji has a nomi-
nal production capacity of 310,000 barrels per
day. However, since May 2006, the refinery
has not produced more than 170,000 barrels
per day, and recent production has been as
. ' ,
low as 7.500 barrels ncr dav. Four m i m m
factors have lirn.tcd produstion at the Bani
, adequate facilities to refine further, store, or
refinery: maintenance issues with key corn-
puneniii in the refinery, an inefficient refinng
process, an unreliable flow of crude oil into
the mfinerf, and security threats to personnel.
Maintaining the refinery's outdated equip
ment is a challenge. Two of the refinery's
three plants have been shut down since May
2006 due to mechanical breakdowns, schcd-
uled maintenance, power outages, and fires.
One power outage damaged the refinery's
USS20 million hydrocracker, a critical piece
of equipment used to convert heavy fuel oil to
usable products.
A second factor limiting production at Bnyji
is inefficiency in its refining process. For
every two barrels of erode oil brought into the
refinery. Bayji produces about one barrel of
usable product, for an efficiency rate of about
50%; modern refineries can have efficiencies
of 90% or higher. The result of the inefficient
refining process is a large amount of heavy
fuel oil (HFO) byproduct. Bayji does not have
dispose of this byproduct; the excess HFO
thus interferes with production and storage of
usable products.
Production at Bayji is also affected by the
interrupted flow of crude oil into the refinery
from Kirkuk through three key pipelines. The
flow has been periodically halted by corro-
sion, fires, maintenance, and attacks, all of
which serve to hamper production of refined
products and crude oil for export. Construc-
lion of a new 40-inch line is scheduled to be
completed in September 2006.
h'lectricifv Production and Distribution
The electrical generation and distribution
system in Iraq suffers from unscheduled
downtime due to the fragile condition of the
electric grid, sabotage, and poor maintenance
uactices. In addition. shortfalls in ~ctrolcum
production and distribution lead to occasional
ftiel shortages for electric generators.
Despite problems, peak capacity and hours of
power continue to improve. During this
reporting period, peak generating output was
5,283 MW on July 17, 2006, with an average
peak generating output of 4,573 MW over the
!xrlod. This is an tnmrovcrnentof l5.8Y0over
14 hours of power G d a y this quarter,an
improvement of 3 hours per day over the pre-
vious quarter. Baghdad averaged 8 hours of
power per day, twice what it had averaged six
months earlier.
As Iraqis purchase additional electric appli-
ances, demand far electricity continues to
increase. Estimated demand over the 30-day
period ending July 15,2006, was 8,928 MW.
To date in 2006. the hichest dailv oeak sumiv
was 5,283 MW; 2% below the 2005 peak of
5.389 MW. With all stale-owned gencrnlon,
running, theoretical maximum output is
8,551 MW, or 96% o f this estimated new
demand. However, that level of output has not
been achieved, nor could it be sustained if it
were achieved. The Government of Iraq's
goal for average peak generating output by
the end of December 2006 is 6,000 MW per
day. During times when state-generated elec-
iricity is not available, many Iraqis meet their
electricity requirements through private
 Average Dally Hours of ElectricalPowr per P ~ O V ~ ~ C O
Aprli-June 2006
generators. Electricity usage in Iraq appears to
be in accordance with or less than regional
norms. Nonetheless, the data support the con-
tention that the current connected capacity is
not sufficient to support a growing economy.
The subsidized state distribution rate affects
electricity demand, and current electricity
rates are nominal, well below regional aver-
ages. In addition, not all Iraqis pay for their
slate-supplied electricity. About 70% of
homes have meters and are billed. Of those,
about 70% pay their electric bills. The rate
billed is equivalent to USS.002hh. Owners
i f private neighborhood generators bill their
customers at a rate about 40 times higher,
around US$.08/kwh.
The communications sator contin- to
expand, although this expansion is slowing
down in comparison with its explosive growth
immediael) after the fall of the previous
regime Whereas the number of landline sub-
scribers is relatively stable, the three major
cell phone companies wntinue to enroll sub-
scribers. 1RMO reports that as of July 25.
2006, there WOT 7.1 million cellular tele-
phone subscribers and 1 million landline wn-
nections. This reflects an increase in cellular
subscribers since the last report. The number
of cellular telephone subscribers has doubled
over the last nine months. The state-owned
Internet service provider (ISP) currently
serves 197,310 subscribers, a slight decrease
since May 2006. This figure excludes private
ISPs and public Internet cafes. It is unknown
whether expansions of private sector ISPs
drew customers from the stale-owned service.
U.S. Government projects continue to support
improved communications among loqi mi"-
istrics. Thiq-five of 42 government shcs in
Baghdad, the CBI, and TWO state-owned banks
arc now connected via the wireless broadband
network. The U.S. Government continues lo
train Iraqi tclccommumcation~ engineers on
proper operations and maintenance proce-
dures to maintain and broaden this network.

New projects have "added capacity to provide
an estimated 4.2 million people with access to
potable water-an increase of 1.2 million
people since the May 2006 reportÑbu direct
measurement of water actually delivered to
Iraqis is not available."' Additional projects
currently under way should increase infra-
structure capacity lo provide access to clean
tatcr to as many as 5 million more people.
Obstacles lo Provress
There is significant black market activity in
Iran. much of it in oil nroducts. Ahhoueh
crude 01' can be sold on the black market.
refined product requires less handling. un be
solo almost anywhere, and i s more difficult to
trace, thereby making it more profitable.
Much of the black market and corruption
activity centers on refined products, such as
gasoline, benzene, LPG, and diesel.
Although the increases in the official prices
have reduced the economic incentive to
smuggle fuel, smuggling fuel for resale inside
' Special Inspector GenenU Iraq Reconstruction
(SIOIR)report, 30 April 06, httc://www.slgb.mIl,
and outside the country remains a serious
issue. Turkey,where high taxes keep gasoline
priced near US55 a gallon, is a lucrative target
for smugglers. However, a significant portion
of illegal trade results in constraining the
upply of gasoline in Baghdad, giving motor-
ists few alternatives to purchasing black
market fuel at increased prices. Some pipeline
interdictions are due to insurgent attacks,
while some are botched attempts to steal fie1
by tapping into a flowing product line. Other
incidents include deliberate acts of sabotage
intended to manipulate the fuel supply to spur
increased profits for black marketeers and
corrupt officials.
Black market prices for Aid vary by refined
fuel type: Benzene typically sells for 3-5
times the government established price, while
LPG has recently been selling for 10-20 times
the official price. This gap between the
official price and the black market price pro-
vides a strong incentive for corruption. The
U.S. Embassy has engaged the Government
of Iraq to follow through on their stated com-
mitment to encourage liberalization of the
retail fie1 market through enactment of the
Fuel Impon Liberalization Law being con-
sidered by the CoR. This reform will allow
the private sector to Import fuel and sell it at
 market prices. This step is viewed with con-
troversy in Iraq. Economists predict that
private sector retail vendors of petroleum
products would undercut the illeeal market.
thus driving them out of business once the
Government of Iraq passes the import liberal-
ization law
1.3 The Security Envlmnmnt
Defeating die enemy, breaking die cycle of
violence, promoting reconciliation, and transi-
timing security responsibility to the Govern-
ment of Iraq remain the top goals in the secu-
rity Back. To achieve these goals, the United
States, its Coalition partners, and the Govern-
ment of Iraq are focused on objectives that
include:
. neutralizing enemy effectiveness, influ-
ence, and ability to intimidate;
rapidly reducing sectarian violence and
eliminating death squads;
increasing the capacity of the Govem-
ment of Iraq and its security structures
and forces to provide national security
and public order; and
helping Iraq strengthen rule of law
capabilities in the areas of law enforce-
ment, justice, and the corrections
system.
Indicators of the security environment
include:
comoosition. strencth. and su~nortfor
groups that threaten security i d stabil-
ity: anti-government and anti-Coalition
. forces (the "enemy");
..
.. suo~ort-
activity. . and efforts to disband.
disarm, and reintegrate militias;
attack trends (including the number of
attacks and their effectiveness);
levels of sectarian violence;
NY TIMES
Iraqi public perceptions of security and
security institutions; and
capabilities of the ISF and Iraqi
institutions.
Information about the ISF is presented liter in
this report.
Environment
During this reporting period, attacks and
civilian casualties have risen, characterized by
ethno-sectarian attacks and reprisals. Violence
escalated norably in Baghdad, which, as the
political, population, and media center of the
country, is a high-value target for terrorists.
Violence in Basrah also rose, partly in
response to British actions against the JAM.
The death of terrorist Abu Musab al-Zarqawi
1 June was a major success for the Coalition
and the Government of Iraq, but al-Qaeda in
Iraq remainsable to conduct operations due to
its resilient, semi-autonomous cellular struc-
ture of command and control Terrorists have
failed to advance their primary objectives,
which include derailing Iraq's political
process and widening their political support
among the Iraqi people. The Iraqi Army took
thc lead in more counter-insurgency opera-
tions and assumed security responsibility in
o x areas since the last report. The Iraqi
people continue to express confidence in the
Iraqi Anny to provide for their security and to
reject al-Qaeda in Iraq's vision of Iraq's
falure, but they arc increasingly turning to
militias and neighborhood watch groups to
provide security from sectarian violence.
Overall attack levels are higher than last
quarter. In particular, attacks have increased
in southwestern Diyala Province and in the
cities of Mosui and Kirkuk. Extremists seek-
ing to stoke ethno-secbxian strife have
increasingly focused their efforts on civilians,
inciting a cycle of retribution killings and
 I AI-Qaeda in Iraq Influence
driving civilian casualties to new highs. Much
of this violence is focused on Baghdad, as
terrorists, insurgents, and illegal armed groups
recnmi7-ed the ~oliticaland economic simifi-
cdnce ofthc capital city. As described besow,
the Government of Iraq and the Coalition are
tnking significant steps to reverse the upward
trend of violence in Baghdad.
Recent Develo~menuin the Security
Environment
Rising sectarian strife defines the emerging
nature of violence in mid-2006. Since the last
report, the core conflict in Iraq changed into a
struggle between Sunni and Shi'a extremists
seeking to control key areas in Baghdad,
create or protect sectarian enclaves, divert
economic resources, and impose their own
respective political and religious agendas.
Death souads and terrorists are locked in
mut~allyreinforcing cycles of sectarian strife,
8th Sunni and Shi'a e x n - m s t s each p m y -
ing themselves as the defenders of their
NY TIMES
respective sectarian groups. However, the
Sunni Arab insurgence remains potent and
viable, although its visibility has been over-
shadowed by the increase in seclarim
violence.
On June 14, 2006, l n q i Prime Minister
al-Maliki announced the government's plan to
provide improved security conditions in
Baghdad. Operation Together Forward, or
Amaitya Ma'an ila A/-Amam in Arabic, con-
sists of increased checkooints- curfews. and
enforced -pons bansto reduce sectarian
violence in lucused areas withm Baghdad
Security forces are also conducting raids
against terrorist cells and death squads. As
part of this operation, Iraqi police, the Iraqi
Army, and National Police, supponed by
Coalition forces, increased patrols and check-
noints in all areas of Bachdad. while c o w -
k t m g on areas ofthe city that have witnessed
in:reaws in violence and securian killings
SecunN f o r m also worked to block terron'rt
entry into thecapital city.
 The confluence of high attack level-any
targeting civilians~and the increased sec-
tarian violence, combined with the need to
ensure that the Government of Iraq maintains
momemum in political progress and counter-
insurgency, made Baghdad security a decisive
element in the campaign. Given the wm-
plexity of the security situation in Baghdad,
the Iraqi government planned to execute and
m p l e t e Amaliya Ma'an ila Al-Amam over a
period of months, not weeks. After the first
month of Amaliya Ma'an ila At-Amam, the
operation had arrested but had not reversed
the high attack levels seen in May and June.
The average of 23.7 attacks per day across
Baghdad's 10 districts was virtually un-
changed from the 23.8 average daily attacks
that occurred the month prior to the operation.
Moreover, the rate of sectarian-motivated
murders and execution-style killings con-
tinued to rise, primarily in and around
Baghdad.
In July, during the prime minister's first visit
to the United Stales. Prime Minister al-Maliki
and President Bush announced an adjustment
to the Baghdad Security Plan One of the key
changes is an increase in security force levels
in the city. Elements of the Call Forward
Force were brought forward from Kuwait and
other Coalition and Iraqi units were reposi-
tioned from less active areas ofthe country. In
addition, the Secretary of Defense extended
the 172nd Stiyker Brigade Combat Team's
deployment in Iraq for up to 120 days.
Because the 172nd was largely successful in
working with the ISF to improve security in
northern Iraq, it has been repositioned into
Baghdad.
In addition to increasing force levels in
Baghdad, the Coalition and the Government
of Iraq developed and refined tactics, tech-
niques, and procedures designed to reduce the
sectarian killings. A primary focus is elimi-
nating the death squads responsible for the
NY TIMES
predominance of the execution-styk killings
and other murders in the city. The death
squads have fomented sectarian violence, os
killings prompt further killings of revenge.
Coalition forces and the ISF are also targeting
the death squads and other illegal aimed
groups using checkpoints, patrols, driving
bans, curfews, weapons-law enforcement,
intelligence-driven operations, and other
mcthods. The ISF will rely on their training,
experience, and familiarity with Baghdad's
milieu to focus on neighborhoods with the
highest levels of violence. Coalition forces
remain in a supporting role and will be
employed as requested by Prime Minister
al-Maliki and directed by the MNF-I com-
manding general.
The two primary objectives of the security
operations in Baghdad arc rapidly reducing
sectarian violence by de-kgitiiizing the
illegally armed groups and establishing the
ISF as the dominant security presence. The
changes described above represent a wn-
ccrted, focused effort by the Coalition and the
Government of Iraq. By strengthening the
capacity of the Government of Iraq and
spurring economic growth in Baghdad, the
United States will help the Government of
Iraq succeed in protecting its population and
restoring the confidence of the Iraqi people in
thch h k .
Violence in Baghdad is the most prominent
feature of the conflict in Iraq in this period, as
Sunni and Shi'a extremist death squads
pursue their sectarian agendas. The resulting
violence overwhelmingly targets civilians,
causing segments of the populace to tolerate
or even endorse extremist actions on their
behalf as an effective means to euanuitee their
safety. undermining both the Govennnmt o f
Iraq's *bilit\ to deliver sccunty and its pursuit
of a reconciliation program. Although
Baghdad remains the focus for sectarian and
terrorist violence i n Iraq, violence tied to the
Rejecticnist insurgency, terrorist intimidation,
political and tribal tensions, and criminality
continue i n other regions. Sectarian violence
is gradually spreading north into Diyda
Province and Kirkuk as Sunni, Shi'a. and
Kurdish groups compete for provincial
influence. Conflict in Anbar Province remains
centered on the Sunni insurgency. Although
al-Qaeda i n Iraq continues its intimidation to
coerce passive Sunni support, tribes are
pushing back to eject al-Qaeda in Iraq and re-
establish their dominant role. I n the southern,
predominantly Shi'a region o f the country,
political and tribal rivalries are a growing
motive behind violence, particularly i n
Basrah, with limited anti-Coalition forces
attacks likely undertaken by rogue Shi'a
militia with Iranian support.
Violence against the Iraqi people and Coali-
tion forces is committed generally by a corn-
bination o f both Sunni and Shi'a groups, who
are overwhelmingly Iraqi but with a small yet
significant component of foreign suicide
operatives. Sunni groups include Rejection-
ist-many of whom were members of, or
associated with, the former r e g i m d
terrorists groups, including al-Qacda in Iraq,
Ansar al Sunnah (AS), and other smaller
groups. Shi'a groups include elements o f
militias and illegal armed groups, many o f
whom receive Iranian support. The threat
posed by Shi'a illegal armed groups, filling
perceived and actual security vacuums, is
growing and represents a significant challenge
for the Iraqi government. The appearance and
activity o f death squads is a growing aspect of
the violence i n Iraq, with both Sunni and
Shi'a death squads adding to the violence by
targeting civilians and inciting reprisal. Al-
Qacda in Iraq and elements o f JAM
(nominally under the control of Muqtada
al-Sadr) are among most prominent groups
engaging i n a continuing pattern of attacks
and reprisals against individuals or com-
munitks representing the other's sectarian
affiliation. Thus, the violence i n Iraq cannot
be categorized as the result of a single
organizedor unified opposition or insurgency;
the security situation is currently at its most
W ~ D state~ X since the initiation o f O~eration
lraqi Freedom. Similarly, Iraqi or Coalition
sccurin strategies must be tailored for the
different objectives, methods, and support
structuresof each particular threat.
Terroristsand Foreim Fiehleq
AI-Qaeda in Iraq and its affiliates in the
M u W a n Shun Council consist o f both
foreigners and Iraqis motivated by an
extremist Sunni Islamist ideology, which
rejects the West, attacks moderate Islam, and
seeks to establish an Islamic Caliphate in Iraq.
AS is another significant, mostly indigenous
terrorist group that objects to al-Qacda in
Iraq's wanton targeting o f Muslim Iraqis.
Foreign fighters continue to enter Iraq and
constitute the majority o f those conducting
suicide attacks. Sunni extremists continue
their efforts to force Coalition withdrawal,
perpetuate sectarian violence, and make Iraq
ungovernable as a means o f establishing the
Caliphate. The death o f Abu Musab al-
Zarqawi has dealt a significant blow to al-
Qfleda i n Iraq, though the cellular nature o f its
robust network allowed decentralized opera-
tions to continue. Since then, al-Qaeda i n Iraq
has fomented sectarianviolence through high-
profile attacks against Shi'a civilians and is
engaged in a cycle of retaliatory violence
involving elements o f JAM.At-Qaeda in Iraq
recently announced that its "Umar Brigade"
that would begin targeting JAM i n retaliation
for death squad activities i n an effort to
portray al-Qaeda i n Iraq as a protector o f the
Sunni. Additionally, al-Qacda i n Iraq Icadcr-
ship is increasing convergent with al-Qacda
senior leaders on goals and strategy following
Zarqawi's death. The recent statement from
Usma bin Laden on June 30,2006, in which
he addresses the Iraqi "jihadists," frames the
conflict in terms of attacking those who
support the Government of Iraq. He also
warns Shi'a in "southern Iraq" that they are
not safe, if they continue to support Coalition
operations against Sunni urban centers in
Anbar Province. This is a clear attempt to
recast al-Qaeda in Iraq as the most effective
defender of Sunni interests.
Sunni Re~mionistsuse violence and coercion
in an attempt to force withdrawal of Coalition
forces, prevent Shi'a economic and territorial
dominance, and reverse Sunni political
marginaliilion by regaining a privileged or
protected status within a unified Iraq. The
1920s Revolutionary Brigade is the most
prominent of these Rejcctionist groups. Sunmi
Rejcctionists continue to target Coalition
forces at rates higher than Sunni extremist or
Shi'a militia groups. The bulk of the Rcjec-
tionist insurgency will likely continue to
attack Coalition forces while they remain in
Iraq. Some elements are indicating an interest
in Prime Minister al-Maliki's new reconcilia-
tion effort, while still employing violence
against the Coalition forces and the ISF from
a sense of honor and as a means to force
meaningful political accommodation. Modcr-
ates say they will accept reconciliation
inducements and disarm only after death
squads are eliminated; Shi'a militias are
disarmed; and key security, amnesty, and
political demands are met. Other hard-line
elements of Rejectionist groups provide pro-
fessional military skills to al-Qaeda in Iraq
and other extremists to achieve common
tactical objectives. Other Rejectionists,
including some in Anbar and Baghdad, are
weary of al-Qacda in Iraq's violent intimida-
lion tactics and actively oppose alQacda in
Iraq, sometimes mounting their own anti-al-
Qaeda in Iraq attacks and raids.
Death squads are armed groups that conduct
extra-iudicial killtm. Death sauads are
formed from terrorists, militias, ilkgai armed
groups, andÑi some c u e s ~ r o g u eelements
ofthe !SF Both Shi'a and Sunni death squads
arc active in Iraq, and arc responsible for the
most significant increases in sectarian vio-
lence. Death squads predominantly target
civilians, and the increase in death squad
activity isdirectly comlated with the increase
of civilian casualties. Coalition forces and the
ISF are actively targeting elements that
participate in death squad activity.
Militias and small, illegally armed groups
operate openly and often with popular
support, This is especially true in arefifi where
the Governmentof Iraq is perceived as unable
to provide effective social and security
services for the population. M i l i t i i h e t h a
- .
leeal or illeealÑorovid an element of
pr-oicction fw select portions ofthe popa.ace.
usually on an cthno-sectarian basis, resuiting
in, overall, a more dangerous environment for
the Iraqi community. Some militias also act as
the security arm of organizations devoted to
social relief and welfare. lending these armed
groups funher legitimacy Whether operating
within or outside die law, these armed groups
operate sepaiaiel) from formal public safety
structures. Their continued existence chal-
lenges the legitimacy of the constitutional
government and provides a conduit far
foreign interference. An effective disarma-
ment, demobilization, and reintegration pro-
gram is essential to meeting near- and long-
term security requirements for Iraq.
 Although a number of militias and illegal
armed groups have operated in Iraq since
before the liberation, the groups that are
affecting the current security situation the
most are the Badr Organization and JAM.
The Badr Organization is an authorized
militia under the Iraqi Transitional Adminis-
trative Law that p d a t e d the present Consti-
tution, and the organization actively partici-
pates in the Iraqi government. The Badr
Organization has not engaged in active vio-
lence against Coalition forces or the Govern-
ment of Iraq; it attacks Sunni targets and in
the past has also confronted JAM in an effort
to prevent its expansion of power and
influence among the Shi'a. The Badr Organ-
ization receives financial and materiel support
from Iran, and individuals from Badr have
been implicated in death squads.
JAM is not a legal militia under Iraqi law.
However, it is well known and supported
popularly in Baghdad and the southern prov-
i s of Iraq, and has achieved a measure of
tolerance from elements of the Government of
Iraq. JAM is closely associated with the
Office of the Martyr Sadr and is nominally
responsive to his direction. Most, but not all,
JAM elements are following Sadr's order not
to engage Coalition forces or the ISF except
in self-defense. Still, violence between JAM,
the Iraqi Army, and to a lesser extent Coali-
tion forces, is frequent. Rogue JAM elements
are amonc the main oeroehators of sectarian
violence.&d JAM me;btfrs frequently par-
ticipatc in death squad acii\itics As described
&me. JAM and Radr Organization members
have periodically attacked one another in the
past and are political rivals, but intra-Shi'a
conflict has taken a back seat to the ongoing
battle of violence and revenge between mi.
Qaeda in Iraq and elements of JAM. Like
Badr, JAM receives logistical support from
Ira".
HY T H U S
The Peshmerga are, technically, not a militia,
but hive the status of an authorized armed
force. The Peshmeigo maintain security inde-
pendently within and along the borders for (he
Kurdish Regional Government. Some ele-
ments arc integrated into the IPS. The
Peshmerga predominantly operate in Kurdish
regions, but have also been employed in the
private security company role outside of
Kurdistan. The Peshmergo do not attack or
oppose Coalition forces or the ISF. In some
cases, Peshmerga provide security for Coali-
t i reconstruction efforts. Over the long
term, however, the perceived dual allegiance
of the Peshmerga is potentially inconsistent
with effective national security and gover-
nance.
Unlike the Kurdish and Shi'a militia groups,
Sunni Arabs do not have formally organized
militias, but rely on neighborhood watches,
Rejectionists, and, increasingly, al-Qaeda in
Iraq. The presence of Peshmeqa, Badr
Organization, and JAM individuals in the IPS
and the National Police contributes to Sunni
concerns about fie potential for persecution
and partisanship. The rise of sectarian attacks
is driving some Sunni and Shi'a civilians in
Baghdad and the mixed-ethnic provinces to
support militias. Such support is likely to con-
tinue in areas where Iraqi institutions and
forces are perceived as unable to provide
essential services or meet security require-
ments.
Without an apparent political motive. conven-
tional criminal elements are also capitalizing
m the instability in Iraq, although it is
increasingly difficult to distinguish among
activities conducted by criminal, insurgent,
and terrorist croups, as all arc engaged in
kidnappings, extortion, assaults, and other
illegal behavior. In some cases, criminal
 gangs work with terrorist organizations, with
the former abducting hostages and selling
them to the latter, which can use their captives
for publicity or to obtain ransom. The various
groups involved in illicit activity are doing so
lo generate revenue, expand their influence,
and facilitate further criminal, terrorist, or
insurgent operations,
Attack Trendrand Vlalmce
For this report, the term "attacks" refers to
specific incidents reported in the Multi-
National Corps-Iraq (MNC-1) Significant
Activities database. It includes known attacks
on Coalition forces, the ISF. the civilian
population, and infrastructure.
In the government establishment period
beginning May 20,2006, the average number
of weekly attacks increased 15% compared to
the previous reporting period. Weekly attack
levels in July 2006 were the highest to date.
Coalition forces continued to attract the
majority (63%) of attacks. However, the ISF
and civilians continued to suffer the majority
Average Weekly Attack* by Thm Puted
1 Apr 04-1 1 Aug 06
HI TIMES
of casualties. Overall, Iraqi casualties
increased by 51% compared to the previous
quarter. Most attacks targeting Coalition
forces were "stand-off" attacks, not involving
close-up confrontations between Coalition
forces and insurgents. Such attacks typically
consisted of improvised explosive devices
(IEDs), small amis fire, and indirect fire
weapons. The number of car bombs this
quarter increased to levels last seen in the
summer of 2005. Over the last quarter, car
bombs were largely centered on Baghdad,
Mosul, Kirkuk, and the Western Euphrates
valley, and primarily targeted civilians or ISF
checkpoints.
Although die overall number of attacks
increased in all categories, the proportion of
those attacks directed against civilians
increased substantially. Nationally, in April
2006, civilians were the target of 11% of
attacks; this increased to 15% in June 2006.
Baghdad showed a more pronounced shift in
the targeting of civilians compared to the
I trend, In Baghdad, civilian targete
comprised 15% of total attacks in April and
 werage Dally Casualties* -Iraqi (Including ISF) and Coalltl~n
1 Apr 04-11 Aug 06

Total Attacks by Province

20 May4 Aug 06

22% in June. The increase

- in attacks over the Four of lrao's 18 rorovinces(Anbar. Baehdad.
7

past two quarters reflects heightened sectarian Diyala, and Salah ad Dm) continue to eiipcn-
tension following tic Golden Mosque bomb. encc the majority of attacks Anbar and
ing and increased death squad activity. Baghdad are the worst affected provinces,

MY TIMES
 accounting for 55% o f all attacks. Further,
Ninewah and Tamim have seen significant
increases in attacks over the last quarter.
The average weekly number of attacks on
critical infrastructure providing essential ser-
vices to the Iraqi people, such as electrical
power, water, and fuel, cominued to decline
over the past quarter, decreasing from an
average of five per week to an average of two
per week. However, the effect of these attacks
has been disproportionate10 Their numbers for
several reasons. Most notable among these is
the slow rate of repair to damage from pre-
vious attacks. At other times. Iraai officials
may be slow m in-tiating repairs Infrastmc-
wre repair is often hampered bv insurgent or
other criminal intimidation o f maintenance
workers. Not all attacks and intimidation are
the result of insurgent or other ami-govem-
ment activity, as described in the economic
section. Criminal activities, such as extortion
and black rnarketeering, also have outlets in
Infrutructura Atucks
Weekly Avenge' by Time Period
1 Anr 04-11 Aua 06
KY TIMES
disrupting public essential services. Allhough
the number o f attacks is decreasing, the
essential services infrastructure will continue
to be a high-value target for enemy elements.
Successful attacks on the infrastructure
adversely affect the legitimacy of government
in the minds of the civil population by
reducing the supply o f essential services.
Concernsof Civil War
Sustained
- - ~ - ethno-sectarian violence is the
greatest threat to security and stability in Iraq.
Breaking this cycle o f violence i s the most
pressing immediate goal of Coalition and
Iraqi operations. Conditions that could lead to
civil war exist in Iraq, specifically in and
around Baghdad, and concern about civil war
within the Iraqi civilian population has
increased in recent months. Notwithstanding
this concern, there is no generally agreed
upon definition of civil war among academics
or defense analysts. Moreover, the conflict in
Iraq does not meet the stringent international
legal standards for civil war. However
 defined, movement toward civil war can be
prevented. The U.S. and Iraqi governments
are continuing the military, diplomatic, and
political actions needed to prevent a. civil war
and bring the situation in Baghdad under
control. Sectarian violence is largely confined
to the communal level. Furthermore. the Iraqi
institutions of the center are holding. Iraqi
leaders must take advantage of the popular
support for democracy, a unified Iraq, and
opposition to violence to form institutions that
take responsibility for Iraq's security.
Sectarian tensions increased over the past
quarter, demonstrated by the increasing
number of executions, kidnappings,attacks on
civilians, and internally displaced persons.
According to an estimate by the United
Nations. 22.977 families~l37.862 individu-
alsÑhav been displaced in Iraq since the
February 22, 2006, S a m m Mosque bomb-
ing. Sectarian violence is concentrated on the
boundaries of mixed and ethnically dominated
areas of Baghdad and in southwestern Diyala
Province.
According to MNC-I reporting, civilian
casualties increased by approximately 1,000
per month since the previous quarter. Execu-
tions in particular reached new highs in the
month of July. The Baghdad Coroner's Office
HY TIMES
reported 1,600 bodies arrived in June and
more than 1,800 bodies in July, 90% of which
w . e- assessed
~- to be the result of executions.
This is due to increased targeting of civilians
by al-Qaeda in Iraq and the increase in death
squad activity.
Sunni and Shi'a extremists, particularly rogue
JAM elements and al-Qaeda in Iraq, are, as
noted, interlocked in retaliatory violence and
are contesting control of ethnically mixed
areas to expand their areas of influence.
Throughout the past quarter, rogue JAM
members continued a campaign of oven
executions and mass kidnappings of Sunni
civilians. At the same time. Sunni extremists
continued to respond by carrying out large-
scale and mass-casualty bombings of Shi'a
gatherings and culturally significant sites.
Attacks on Shi'a by al-Qaeda in Iraq and
other Sunni elements are apparently designed
to inflame sectarian tension, which in turn
generates and results in retaliatory attacks on
Sunni civilians by rogue Shi'a elements.
These rogue Shi'a actions increasingly appear
intent on securing Shi'a enclaves and
establishing control of contested areas of
Baghdad. Coalition forces and the ISF are
responding by increased targeting of both
Sunni and Shi'a death squads.
 Sectarian Incidents

HY TIKES
Public PerceptionsofSecurity
Ultimately, stability and security i n Iraq
depend on the support o f the Iraqi people. I n
general, Iraqis have had an optimistic outlook
on their future and the overall security situa-
tion. However, as time has passed, their
optimism has eroded. The aftermath of the
Golden Mosque bombing and the growing
sectarian violence continue l o shape their
perceptions. As sectarian violence increases,
the view of the security situation worsens.
With the view that Baghdad is the key to Iraq,
a similar sentiment toward security exists
there.
A n Indication o f support for the Government
o f Iraq within the country is the level of con-
fidence that the Iraqi people expressly place
i n the ISF Forces, especially when compared
against militias or other iilegal armed groups.
Since the previous report, confidence in the
Iraqi Army has remained generally constant,
with the notable exception o f Baghdad, where
public confidence improved. Despite the
increase i n violence, confidence in the Iraqi
Army rose from 69% to 78%. Despite the
recent violence i n Basrah, polling data that
include the Basrah area indicate increased
confidence in both the police and the Iraqi
Anny over the last reporting period. Con-
fidence in militias is mixed, with a rise in
confidence in Baghdad countering an overall
downward confidence trend elsewhere.
The perceptions of the Iraqi population will
slowly respond to visible, effective actions
performed by the IPS. I t w i l l take continued
diligence on the pan o f the Iraqi Police to be
seen as actively patrolling their areas and
arresting individuals for criminal activity,
while paying particular care to avoid the
appearance o f sectarianism.
Another indicator is Iraqi use o f the
intelligence hotline for providing tips to
authorities about suspicious activity. The
population has continued to demonstrate its
willingness to report such activity and thereby
upport the government's efforts against
terrorism. Since mid-March, the number of
tips has increased (ice following chart) Con-
tinued timely and effective response o f the
IPS to these tips should increase the con-
fidence ofthe population.
How concerned are you about an Increase in
sectarian or ethnic violence In Iraq?
 Stcurily in Baghdad. .

I % ExprÑIn confidence In-

InIraq*
to improw the sltuatlon

WT TIMES
 Total TIPS Actionable Calk 1

NT TIKES
HT TIMES
 2. Iraqi Security Forces Training and Performance
The ISF continue to grow in strength and
capability as indicated by:
progress in the training and equipping
ofISF personnel;
assessed capabilities of operational
. units; and
progress in assuming responsibility for
security ofareas within Iraq.
Institulional capability within the MOD and
the MOI is an increasingly important indica-
tor of the transition to Iraqi security self-reli-
ance. As the MOD and the M01 continue to
staff, train, and equip forces, increased
emphasis is placed on the development of
institutional capacity to direct, support, and
sustain the ISF.
NY TIMES
2.1 Progress in Training and Equipping
the Iraqi Secirity Fo-
Force generation continues on schedule this
quarter. More than 14,000 additional Iraqi
soldiers and police have completed initial
training and equipping since May 2006,
bringing the total number of ISF trained and
equipped to 277,600,
More than 92% of authorized Iraqi Army
battalions are assembied. Train-and-cquip
efforts remain focused on building combat
support and combat service support forces
providing key enablers to Iraqi combat forces.
When fully established, these unils will
provide critical combat enablers, such as
logistics and transportation support, iniclli-
gence, surveillance, and reconnaissance. More
than 65% of authorized personnel in the Iraqi
Army support forces have been trained and
equipped. Logistics units and overall logistics
capability continues to improve.
MOI Mattonal Polio Force*' Asuux) CiplbllMÃ
 2.2 Progress in Assumimg Leadenhip in
Counter-Insurgency
The ISF arc invreasingly taking the lead in
operations and assuming primary respon-
sibility for the security of their nation, as Iraqi
army and police forces demonstrate an
increased capability to plan and execute
counter-insurgency operations. The following
charts depict this progress. As of August 7,
2006, 5 Iraqi Army divisions, 25 brigades,
and 85 battalions, and 2 National Police
battalions assumed lead responsibility for
security in their areas of operation.
In total, there are 106 Iraqi Army combat
battalions and 8 Strategic Infrastructure Bat-
talions (SIBS) conducting operations at vary-
g levels of assessed capability. Another
three combat battalions are in the process of
forming. In addition. 27 National Police bat-
talions are now operational and active. The
green shaded areas on the maps above depict
areas where Iraqi Army units have assumed
the lead for security responsibility. A unit can
1 -ml,'. Iraqi Army Lead a n d National Police Lead
43
HY TIMES
assume the lead once it has been thoroughly
assessed and has demonstrated that it is
capable of planning and executing combat
operations. Although these units lead security
~. . ..
oneratiom.. most still reouirc suowrt from
Coal lion forces because their logistics, sus-
unmncnt, and command and conud capabili-
ties arc not fully dcvc.oped. The Coalition's
primary force development objective to date
has been to produce trained, equipped, and
capable combat units; there has been less
emphasis placed on enablers, including logis-
tics and command and control. Now that more
than two-thirds of the Iraqi Army combat
n i t s are in the lead, the Coalition's focus will
shift more toward helping the Iraqis develop
the; enablers, MNF-I will also continue to
help improve the capacity of the MOD to
organize, train, equip, sustain, and modernize
its forces, with the goal of eventually elimi-
nating the Iraqi Army's reliance on Coalition
support.
"-19. SOU
 2.3 Ministry of Interior
The objective for the MOI, in partnership
with t k Mini* of Interior Transition Team
WOI-TT), is to become a forward-looking
ministry that is effective, efficient, account-
able, representative, appropriately structured
to deal with the prevailing security conditions,
and staffed by people who are committed to
upholding the rule of law. The MOI forces
consist of the IPS, the National Police, the
border forces, and the Center for Dignitary
Protection.
The MNF-I initiative to develop professional .
civil security forces able to assume the lead
for the security of the Iraqi people has been
dubbed the "Year of the Police." The focus is
on creating a force loyal to the people of Iraq
and its Constitution, and wmmitted to
guaranteeing human rights and the rule of
law. This was designated as one of MNC-1's
main efforts in 2006
Mentoring of civil security forces is con-
ducted by Police Transition Teams (PTTs),
National Police Transition Teams v s ) ,
Border Transition Teams (BTTs), and
Customs and Border Protection Teams
(CBPTs). More than 160 PTTs are assisting
the development of the IPS. Because of the
large number of police stations dispersed
throughout Iraq, the PTT program has initially
focused on provincial headquarters, district
headquarters, and Iraqi police stations in key
strategic cities, but will spread to other sta- The IPS is composed ofpatrol, traffic, station.
tions throughout the country as more stations
achieve a higher level of readiness. To wn-
duct their mission, the PTTs travel to their
assigned stations to train, teach, and coach the internal security at the local level.
Iraqi police and to conduct joint patrols with
their Iraqi counterparts.
The integrationof International Police Liaison
Officers (IPLOs) into the PTTs significantly
increased the Coalition force's ability to
MY TIKES
develop Ole IPS. The IPLOs provide the
civilian police with expertise in all technical
aspects of criminal investigation and police
Station management, The deployment of five
additional Military Police companies in July
2006 added extra PTTs, enabling the expan.
sion of the program to assess and assist in the
developmentofthe IPS.
Twenty-seven BTTs mentor and enable devel-
opment of border forces. Additionally,
Department of Homeland Security Customs
and Border Patrol Teams (CBPTs) provide
critical mentorship at ports of entry, while
38 National Police Transition Teams (NPlTs)
continue to support the development of the
National Police units. These transition teams
are intended to improve the readiness and
capability oftheir MOI partner units.
The Coalition Police Assistance Training
Team (CPATT) is on track la meet the goal of
recruiting and training the authorized number
of MOl forces by the end of December 2006.
The force generation of the Departmen1 uf
Border Enforcement (DBE) and the IPS will
occur in November 2006 and December 2006,
respectively. Specialized police units, such as
the Criminal Investigative Division (CID) and
the National Information and Investigative
Agency (NilA), will be trained by the end of
2006.
and highway police assigned throughout
Iraq's 18provinces. Its mission is to enforce
the law, safeguard the public, and provide
CPATT has trained and equipped approxi-
mately 113,800 IPS personnel, an increase of
12,600 since the May 2006 report. CPATT
projects that it will have trained and equipped
35,000 IPS by December 2006. Although the
 force will be manned in the aggregate by the
end of the year, proper distribution is a
challenge. Certain areas have a shortage of
trained officers while additional hiring in
other areas has resulted in an overage in the
force.
As of July 24, 2006, 71,324 police recruits
have received training in the 10-week basic
course. Police officers with prior experience
attend a 3-week course, the Transitional Inte-
gration Program (TIP), instead of amending
the full 10-week basic course. Originally
intended only for police trained during the
Saddam regime, the TIP was expanded in July
to include serving police officers who have
not been trained but who have served on the
force for at least one year. The TIP includes
training on human rights, crime defensive
tactics, democratic policing, first aid, patrol
procedures, firearms (9mm and AK-47). and
anti-terrorism. The Officer Transitional Inte-
gration Program (OTIP) course curriculum
includes democratic policing, human rights,
first aid, police ethics, supervision an4
leadership, use of force, firearms (9mm and
AK.47). communications and problem-
solving skills, anti-terrorism, patrol proce-
dures, critical for officers, and police investi-
gations. Some 41,051 police officers have
graduated from the TIP and OTIP programs.
IPS Oneratiom
The IPS constitutes the majority of MOI
forces in the country. Each month, FTTs
assess the operational readiness of a portion
of the police forces, using the Transition
Readiness Assessments (TRA) process. The
TRA evaluates the police on the core func-
tions required for effective law enforcement
and community policing. Shortages of PTTs
has limited observation of the IPS in Anbar,
Babil. Basrah, Tamim, Wasit, Karbala,
Maysan, Ninewah, Qadisiyah, Salah ad Din,
Irbil, Dahuk, and Sulamaniyah provinces.
TIMES
However, the recent arrival of five additional
Military Police companies will greatly
increase theability to assess the IPS.
More than 230,000 MOI employees have
been screened by the Iraqi Police Screening
Service, which checks fingerprints against
Ba'ath Party recordsand Saddam-era criminal
records. Of these, 5,300 were reported as
possible derogatory matches, and 74 have
been dismissed. There is currently no screen-
ing process to ascertain militia allegiance.
More than 54,000 police candidates have been
screened for literacy by Morris & McDaniel,
73% of whom passed and were allowed to
enter basic training. Currently, no method
exists to track the success rates of these m"
other police officers.
The IPS is equipped with AK-47s. PKC light
machine guns. Clock pistols, individual body
armor, high frequency radios, s w l l and
medium pick-up trucks, and mid-sized SUVs.
The IPS in Baghdad and the nine other key
cities had been provided with 99% of their
authorized equipment at the end of June 2006.
They will have received 100% by mid-Augusi
2006. The IPS in all 18 ~rovinceshave teen
provided wn'n 66% of their authorized equip-
ment and will receive 100*/~of their autnor-
i^ed equipment b> the end of Dccemxr 2006.
IPS Leadership
Leadership in the IPS is the cornerstone for
success. The IPS currently has three leader-
ship courses to develop high-qualiny leaders.
The First Line Supervisor Course is designed
for company grade officers. The Intermediate-
Level Course is designed for field grade
officers, and the Senior-Level Course is
designed for General Officers. Each course is
 two weeks lone. Program topics are designed
for the target audience and include human
rights. discrimination, right to life. code of
conduct, democratic policing, modem polic-
ing, the role of the supervisor, communication
and the supervisor, delegation, change man.
agement, ethics, police corruption, problem
employees, community policing, field training
police leadership, history o f management,
modem supervision i n today's law enforce-
ment organizations,crime scene management,
civil disorder, records management, budget-
ing, logistics, equipment and facilities man-
agement, group problem solving, mission
values, six-step problem-solving models,
overview of law enforcement planning, strat-
egic planning, motivational theory, and
analyzing employee performance problems. A
plan is in place to develop a more extensive
Intermediate-Level Officers course, slated to
begin in the fall o f 2006.
The Officer Education Svaiem has been
successful in developing jun or leaders loyal
to the Iraqi people However, certain senior
leaders arc products of the former regime and
continue to view leadership as an entitlement,
not a responsibility. As these officers are
identified, they are removed.
Organized into a National Police Hcad-
quarters, two National Police Divisions, the
s t National Police Mechanized Brigade, and
the Emergency Response Unit (ERU), the
National Police are charged with maintaining
law and order while an effective community
police forceis developed.
The National Police Headquarters provides
command and control, staffing, equipping,
training, and sustainment for these National
Police Forces. I t also commands the two
training and professional development acad-
cmics at Camp Solidarity andCampDublin.
The 1st and 2nd National Police Division!
reached 99% o f equipping and authorized
manning by July 2006 and will continue to
progress through TRA levels, with the com-
pletion o f force generation by December
2006.
Unprofessional and, at times, criminal
behavior has been attributed to certain units i n
the National Police. This behavior and the
decrease in public confidence i n these forces
has been the impetus for a National Police
reform program. Each unit and its leaders w i l l
be assessed by a joint (Coalition and Iraqi)
committee. Substandard leaders at all levels
w i l l be removed and units w i l l undergo re-
training.
There am currently approximately 24,300
trained and equipped National Police, an
increase o f approximately 1,600 since the last
report. They are trained in Iraqi taw, human
rights, the rule o f law. and democratic
policing techniques at the National Police
Academy.
New recruits undergo six intense weeks of
training at the academy in northern Baghdad.
Training includes weapons qualification,
urban patrolling techniques, unarmed combat
apprehension, use o f force, human rights and
ethics i n policing, introduction to Iraqi law,
vehicle checkpoints, and I E D characteristics
and recognition.
National Police Operations
A l l National Police battalions are cuirently
conducting counter-insurgency operations,
with two battalions having security lead for
their areas o f responsibility, NPTTs are
embedded at all levels o f the National Police
units, down to the battalion level. A l l National
Police units work in Combined Operations
 Areas (COAs) and partner with Coalition
forces who provide support and advice.
National Police Recrvitine am/ Vetting
The MOI recruits and vets the National Police
force. Coalition forces provide advisors for
the recruiting process, but neither actively
recruit nor provide lists of names of recruits
to the MOI. A National Police officer is
recruited and provided an academy start date;
upon arrival at the National Police academy,
the candidate is interviewed by a senior staff
officer (either a Colonel or Brigadier
General). If he or she passes the interview, the
officer is admitted to the academy. The
individual's nerwnnel file is then forwarded
to The MOI, where a vetting team renews it
If the officer s certified by The vetting pro-
cess, he or she will be retained and allowed lo
complete the academy. Ifthe candidate is dis-
approved, the officer is immediately removed
from the academy.
National Police Equipmew
The National Police have received 92% of
their authorized equipment and will have
received 96% of their authorized equipment
by the end of November, missing its goal of
100% by a small margin. They will have
received 100% of their authorized equipment
by the end of December. The police are
equipped with small arms, medium machine
guns, and RPGs, and they patrol in light
trucks. The mechanized battalions are
equipped with Armored Security Vehicles and
REV&. a South African wheeled APC.
Departmen1 of Ports of E n r ~
The DBE and the Department of Ports of
Entry (POâ‚are collectively charged with
controlling and protecting Iraq's borders.
HT TIMES
The DEE has 23,900 trained and equipped
personnel, an Increase of 1.800 since the
previous report. The DBE isorganized into
5 regions, 12 brigades, and 38 battalions, and
includes the forcesthat staff258 border forts.
Three academics, each with a capacity of
approximately 800, train border patrol forces.
The Iraqi Border Patrol Basic Training
Course focuses on an introduction to law
enforcement, human relations, human rights,
weapons qualification, combat life saving,
vehicle searches, Iraqi border law, arrest and
detainee procedures, and small unit patrolling.
The DEE is supported by 27 Coalition Border
Transhion Teams (BTTs).The I I-man BITS
mentor and support the development of the
border units. The B I T members are trained in
various specia!ties, including logistics and
communications, and provide cnilcal assis-
tance to the border force commanders in the
areas of personnel management, intelligence,
operations, budgeting, equipment account-
ability, and maintenance. Additional BTTs
deployed in early June to support the
development of the POE at critical high-threat
border crossings. In February 2006, MNF-I
supported the accelerated development of the
FOE through the deployment of a combined
Border Support Team (BST), consisting of
customs border protection agents and BITS.
In March 2006, most DBE units reached TRA
Level 3, but remained short of equipment and
key personnel. The DBE and POE arc a
higher priority for allocation of critical
equipment; and cross-leveling of personnel
has occurred to raise units to TRA Level 2.
By November 2006, the DEE and POE ale
expected to have 28,360 trained and equipped
personnel.
There are 14 land POEs, of which 13 are
functional. Efforts continue to improve POE
security. Progress in designation of POE
standard organizations, delineation ofrespon-
sibilities, and development of detailed
policies and procedures has continued. The
U.S. Department of Homeland Security, in
coordination with Multi-National Security
Transition Command-Iraq (MNSTC-I), has
continued its rotation of Cumms and Border
Patrol Teams. These border security experts
have had an important impact on the POEs,
particularly along the Syrian border. The
increased emphasis on BTTs and the Customs
and Border Patrol Teams has improved DBE
readiness levels, as the Coalition's expertise
and mentorship affects the Iraqi border forces.
Organizational equipment includes small and
medium pick-up trucks, mid-size SUVs,
generators, and radios. Personal equipment,
including AK-47s, medium machine guns,
and individual body armor, complete the
outfitting of the border forces. The DBE
currently has received 81% of its authorized
equipment. They will have received 97% of
their authorized equipment by the end of
August, just short of the 100% goal for that
date. They will reach the 100% goal one
month later. Iraqi POEs will have received
100% of their equipment by the end
December 2006.
Center for Dienilarv Proteclion
Training and equipping of the Center of
Dignitry Protection (CUP) Is complete. Tie
force of approximately 600 people has been
prepared to serve as the Protective Security
Details (PSDs) for Iraq's new government
leaders. It is unknown bow many of these
personnel remain employed by MOI. An Iraqi
training team assumed responsibility for
training faturc PSD personnel in June 2006.
In addition to the regular MOI forces, there
are an estimated 145,000 Facility Protection
Service (FPS) personnel who work directly
for each of the 27 ministries. These forces act
as security guards at government buildings
and allow the IPS to police the communities.
They are minimally trained and equipped,
generally without Coalition oversight, and
lack centralized control. FPS personnel have
not always proven reliable, and some have
been responsible for violent crimes and other
I l l activity. Unfortunately, the FPS
uniform looks similar to the police uniform,
which causes many Iraqis to contuse the FPS
with the bener-trained IPS, undermining the
reputation and credibility of the IPS. The
Coalition and the Government of Iraq are
cstafclishing a program of reform to better
regulate the FPS.
M01 Capacity Development
The MOI overall TRA remains at
'IRA 3-Partly Effective. The M01 Transition
Team is working daily in the MOI, stressing
planning and programming resources. The
new Minister of Interior, Jawa al-Buiani, is
embracing the need to reform the ministry.
Logistics is the only essential system still
assessed as ineffective. Improvement of the
logistics system is a focal point for the next
90 days. All other major functional areas and
systems are considered partly effective. Over
the next 90 days, emphasis will also be placed
0 building a solid framework o f plans,
policies, and processes to ensure that the MOI
n manage personnel efficiently, conduct
policing operations effectively, and maintain
and sustain capability.
Logistics capabilities continue to be an area of
significant concern for the IPS, particularly
 with respect lo vehicle maintenance. How-
ever, accountability of equipment continues to
improve as verified by reports submitted by
PTTs. CPATTTMOI-TT continues to orovide
logistical support in both an ad\isoq and
financial capacity to assist bith sustainmen1
operations Recently, a Director General for
Logistics and staff were put in place. A
6-monlh vehicle maintenance contract for the
National Police and the Baghdad IPS was
agreed upon. Currently, there is a
USS950.000 vehicle spare parts contract for
M01 forces, and a US$350,000 vehicle spare
parts contract for the National Police is in
place. The average monthly logistical life
support provided from April through June
was USS20,266,121, for a total of
US$60,798,363 during that timeframe. Con-
struction of a MOI National Storage and
Maintenance Facility was started in June
2006, with an estimated completion in
December 2006. Currently, we are in the
process of conducting a test case to hand over
an LDi storage warehouse (one of seven) to
HT TIMES
Iraqi control in August 2006. A plan is being
formulated to hold a National Logistics
Conference in September 2006
MOI security forces arc on track to reach
December 2006 Objective Civil Security
Force equipping goals. The following graph
depicts the equipping status and key shortfalls
of Baghdad and the 9 other key cities,
18 provinces, the National Police, the DBE,
and the POEs. Equipment-issue priorities
focused on equipping Baghdad, the 9 key
cities, and the National Police, while
simultaneously building initial functionality
in the provinces, borders, and ports of entry.
In general, these goals were met. However,
the MOI doc not currently have an effective
equipment management system in place. As a
result, it is unknown what percentage of the
equipment
. . issued to the MOI is still service-
able.
 Train a n d EquipIUpdate
JW TnInIng
The equipping effort did experience
unforeseen delays.
Large shipments of Russian weapons
were delayed clearing customs while
exiting Russiaand entering Iraq.
Clock pistol delivery delays occurred
when a U.S. manufacturer challenged
the award of the pistol contract to a
non-U.S. company.
Communications gear was delayed due
to shipping problems.
All matters have now been resolved and items
have either arrived or are inbound. All equip-
ment fielding goals are on track to be met by
December 2006.
The MOI does not currently have an effective
personnel management system. As a result, it
is unknown how many of the forces trained
by CPATT arc still employed by the M01, or
what percentage of the 146.000 police thought
HY TIKES
to be on the M01 payroll are CPATT trained
and equipped. CPATT estimates attrition to
be at least 20% per year going forward. The
MOI reports paying death benefits for more
than 6,000 police officers since the fall of the
Ba'athist regime in May 2003.
In addition to the overall number ofnolice in
Iraq. there are some issues with distribution of
the police among the various provinces For
example, by the end of the yew, Diyala
Province will have recruited its authorized
force, hut will not have trained the entire
authorized number. In the case of Oiyala, the
orovincial leadershin has resisted sendint
100% of the force to training due to security
concerns and the reluctance to take its police
o N thc streets. Arbar. Dasrah. and Ninewah
may also miss their training targets for the
same reason. Rather than let training seats go
unfilled, other provinces were permitted to
send some of their untrained personnel to
trainine. As a result, those orovinces will have
more than the authorized force trained in their
provinces.
As with the IPS, the National Police payroll is
significantly larger than its authorized end-
strength. There are currently more than
29.000 National Police on the MOI payroll,
but it is unknown how many of these have
been trained and equipped. Absenteeism
among National Police units generally follows
the same pattern as in the military. Leave
policies and immature personnel management
policies account for 30%-40% of personnel
not present for duly. Absenteeism in the IPS
is difficult to quantify because shift schedules
preclude PTTs from ascertaining which police
officers arc absent and which are simply off-
duty.
The DEE payroll is also larger than its
authorized end-strength, with 25,832 DBE
personnel on the MOI payroll. It is currently
unknown how many untrained DBE personnel
c on the rolls and how many of the trained
and equipped border personnel have left the
MOI. As with the other personnel issues, an
effective personnel management system will
help resolve these reporting and account-
ability deficiencies.
The U.S. Government is committed to helping
the Government of Iraq create an MOI that
reflects the diversity of the Iraqi people. The
goal is to create ethnically integrated units at
the national level, while still allowing local
police to reflect the ethnic composition of the
communities in which they serve.The former
Police Commandos, now part of the National
Police, are becoming increasingly diverse.
The former Public Order Battalions, also now
part of the National Police. tend to be dispro-
portionatcly Shi'a, due to a lack of Sunni par-
ticipation when these units were being formed
in preparation for the January 2005 elections.
Merging the National Police Commandos and
the Public Order Battalions into one National
Police force has helped produce e more repre-
sentative National Police, Recruiting initia-
tives targeting Sunnis have improved the
diversity. Unlike the National Police, local
police forces tend to be of the same ethnic
mix as the communities in which they live
and work.
In 2005, the MOI 1 0 conducted 790 conup-
lion-related investigations. Of these, 472
(60%) w e n closed. Of the 472 closed
investigations. 118 (25%) were forwarded to
the CP[ or to a court for adjudication. 350
(74%) were closed because of "insufficient
evidence," and 4 (1%) were handled as
internal MOI discipline. To improve the IG's
capability to investigate, the Specialized
Advance Training Unit at the Baghdad Police
College will train new MOI investigators. It
will take approximately 18 months to train the
Investieations Directorate at the basic investi-
gator level Beyond the IG training, improve
ments in icaacrsh p oversight, accountability.
and reductions in wIartan ana militia influ-
ence are required before Iraqis become con-
fident that MOI forces can ensure security and
uphold the ruleof law in Iraq.
Corruption, illegal activity, and sectarian bias
have constrained progress in developing MOT
forces. Inappropriate tolerance of and infiltra-
tion by Shi'a militias, some of which are
influenced by Iran, is the primary concern of
the Government of Iraq. A lack of effective
.
leadership. and ~olicies to stem corru~tion
through accountability for actions, equipment,
and personnel have enabled the theft of pay
and equipment, unlawful detentions, and
reported cases of abduction and torture or
execution of Sunnis. The minister is com-
mitted to changing corrupt leaders and insti-
tuting policies to eliminate corruption.
An additional 45 transition teams were
deployed in July to increase PTT coverage
across the country. As stations begin to reach
TRA Level 2 in August, transition teams w i l l
expand their coverage o f nearly 1,000 total
stations across Iraq. This will limit infiliratioo
by militias, improve adherence to the rule of
law, and prevent complicity and participation
in sectarian violence.
2.4 Minlslry of Defense
The Iraqi M O D forces consist of Army
(including Special Operations Forces), A i r
Force, and Navy (including Marines)
personnel. The end state o f the Objective
Counter-InsurgencyForce will be an approxi-
mately 137,500-person force based around an
Army with 9 infantry divisions and 1 mecha-
nized infantry division consisting of 36 bri-
gades and 112 battalions. Nine Motorized
Transportation Regiments, 5 logistics bat-
talions, 2 support battalions, 5 Regional
Support Units (RSUs), and 91 Garrison
Support Units (GSUs) are intended to provide
logistics and support for each division, with
Taji National Depot providing depot-level
maintenance and resupply. Each battalion,
brigade, and division headquarters will be
supported by a Headquarters and Service
Company (HSC) providing logistical and
maintenance support to its parent organiza-
tion. The Army w i l l also include 17 SIBSand
a Soecial Ooerations Forces Bricade consist-
ing of two special operat onai banalions I'hc
Air torcc will consist o f s x squadrois, and
the Navy will consist o f two squadrons and a
Marine battalion.
The Iraqi Army includes approximately
115.000 trained and equipped combat soldiers
(including SIB personnel and around 9,600
support forces). The capability o f Iraqi Army
units continues to improve, facilitated by the
mentoring by embedded -advisors at the
battalion, brigade, and division levels, and
partnership with Coalition force units

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52
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 Combat Operations
1compa"" h l and .bowl
Force generation of Iraqi Army units is
increasingly focused on combat enablers and
continues in accordance with the force
development plan. A l l three planned Iraqi
Training Battalions are formed and fully
operational. These battalions allow the Iraqis
to train soldiers independently in sufficient
quantities for force generation completion and
replacement needs. New recruits attend a
13-week program o f instruction. Upon pdu-
ation, soldiers receive additional training
specific to their military occupation. Depend-
ing on their military occupationalskill assign-
ment, the length o f training ranees from three
to seven weeks. Other training initiatives,
such as the Military Intelligence School, the
Signal School, the Bomb Disposal School, the
Combat Anns Branch School, the hnginccr
School, and the Military Police School,
mtributc to the growing professionalism of
the Iraqi Army through leaching diverse spe-
cialties necessary to conduct and sustain
counter-insurgency operations.
NY TIMES
Three o f the nine planned Motorized Trans-
ponation Regiments (MTRs) are approaching
full onerational ca~abiliw. While a shortfall
of fully wmpctcnt naintcnancc personnel
adversely affects full capabilny. these MTRs
provide improved mobility and sustainment
support for Iraqi forces. Progress has been
made in establishing HSC units for each
combat battalion, brigade, and division to pro-
vide transportation, communications, medical,
supply, and maintenance support. Approxi-
mately 80% of the planned HSCs have been
formed; one-third are operational, and the
remaining planned HSCs are scheduled for
cornpietion by December 2006.
Currently. 17 SIBS are being trained and
equipped. Although the Iraqi Army maintains
operational control of the SIBS, at present
only 1 SIB is capable o f planning and execut-
n g independent operations, and all 17 require
Coalition logistical support. Training o f these
battalions continues to employ a 'Wain-the-
 trainer" model that focuses specifically on
squadron- and platoon-level tasks.
The capability of the SIBS is growing as they
receive training and more modem equipment
MNC-i is partnering the more capable SIBS
with locally deployed Iraqi Army units to
provide them with counter-insurgency experi-
ence and to accelerate their leaders' orofes-
sional development Evaluation o f .her efTec-
ti\cness in securing infrastructure, panicu-
larly oil pipcines in noniern Iraq. is ongoing
The Iraqi Armed Service and Supply Institute
(IASSI) at Taji plays a critical role in training
the officers and non-commissioned officers
(NCOs) to fill support and combat service
support positions in the Iraqi Army. The
IASSI has trained more than 5.000 officers
and NCOs who serve as leaders in the MTRs,
RSUs. and HSCs. The IASSI continues to
support the development o f critical Iraqi
Army support and combat support capabili-
ties.
Special OperationsForces
The Iraqi Special Operations Forces (ISOF)
are comwsed o f aooroximateiv 1.600 soldiers
organized into the Iraqi Counter-Terrorism
Task Force, the Iraqi Commandos, a support
battalion, and a special reconnaissance unit.
The Iraqi Navy is tasked with defending
Iraq's coast,territorial waters, vital ports, and
offshore oil platforms. The Iraqi Navy has
r e than 1,100 trained and quipped sailors
and marines organized into an operational
headquarters, two afloat squadrons, and five
Marine companies. The Iraqi Navy is devei-
oping independent capabilities for surface
surveillance, maritime interdiction, oil ter-
minal protection, and support operations.
MY TIMES
The Iraqi Navy Training Department
continues to develop unit-level refresher
training and naval skills improvements,
including bask seamanship and maritime
security operations. i n June 2006, the Train-
ing Department independently conducted
basic training and successfully graduated 324
naval recruits. Its training efforts range from
mentorship, as conducted by the Naval
Transition Team, to active skills training, as
conducted by Coalition Navy, Marine, and
Coast Guard Forces.
The Iraqi Air Force continues to evolve
toward supporting the counter-insurgency
force, but progress has been slowed by
difficulty in recruiting qualified applicants.
There are currently 750 personnel in the Iraqi
Air Force, with development plans calling for
a concentrated recruitment effort over the
next 18 months to at least double the per-
sonnel by the end o f December 2007. This
effort is intended to provide a satlsfaciory
corps o f professionals as a foundation for
future growth.
The Intelligence Surveillance and Reconnais-
sance aircraft at Kirkuk Air Base (7th Squad-
ron wilh five CompAir 7SLs) and Basrah Air
Base (70th Squadron with two Seekers and
six CH-2000s) are performing operational
missions. These aircraft are primarily
deployed to patrol oil pipeline infrastructure
in the north and south, with occasional
missions conducted in support of Iraqi Army
units. There have been recent airworthiness
issues with the CompAir 7SL aircraft, and the
Coalition is working with the Iraqi Air Force
to develop solutions and alternatives to
continue supportingthe mission.
Helicopter operations from Taji Air Base in
centra) Iraq are still in their infancy, but the
next six months should see a marked
improvement. The 2nd Squadron is expected
to receive the first 6 o f 16 Huey Its from a
modification factory in the United Slates by
the end of January 2007 and the remainder
before April 2007. The 2nd Squadron will
primarily be used for casually evacuation. I t is
expected to reach initial operational capability
by the third quarter o f FY2007.
Three C-130Es from 23rd Squadron at New
Muthanna Air Base round out the Iraqi Air
Force fleet. Early complications with low
mission capable rates have been solved, and
fleet-wide readiness was measured at 72% in
July 2006. The Iraqi Air Force has requested
an additional three aircraft from the U.S.
Government to bring the fleet total to six.
These additional aircraft reflect the Coalition
Air Force Transition Team's force generation
plan and efforts arc under way to identify
additional funding to meet this request.
Ooerariona//Unil Readiness
Embedded Transition Teams continue to pro-
vide monthly TRAs measuring the staffing,
command and control, training, sustainmentl
logistics, equipping, and leadership of their
partnered Iraqi units.
Personnel andEauiomen1Status
The total number o f MOD military personnel
trained and equipped is currently more than
115,000, approximately 84% of the objective
end-strength.
With the generation of Iraqi Army battalions
more than 92% complete, the focus o f the
Iraqi Army's trainand-equip effort shifted
during this reporting period toward building
combat support and combat service support
forces. More than 65% o f authorized per-
sonnel in the Iraqi Army's support forces are
trained and equipped.
Equipping the Iraqi Armed Forces continues
as planned since the May 2006 report, with
92% of authorized equipment issued to the
1 0 I r q i A m y Divisions and subordinate
formations. MNSTC-I is on track to issue all
currently authorized equipment by the end o f
December 2006. Equipment is distributed and
filled according to the commander's opera-
tional assessment. MNSTC-I is currently
working with the M O D to transition main-
tenance capabilities to the Iraqi Army. To
date, two Regional Support Units facilities
have been transitionedto the Iraqi Army.
The lack of junior officers and NCOs
continues to be one o f the biggest factors
impeding development o f MOD forces. There
is a shortage of school-trained officers and
NCOs to fill lower-level staff and leadership
positions. The shortage o f leaders will abate
as officer recruits are commissioned and they
join their units. For NCOs, qualified soldiers
are being "grown from within" through devel-
opment and schooling to achieve promotion
to NCO leadership positions.
The Regional Training Centers (RTCs) and
the NCO Academy focus on junior leader
development that is critical to building a
professional force. The RTCs conduct Squad
Leader and Platoon Sergeant Courses. Newly
formed Sergeants Major and Chief Warrant
Officer Courses have been added to the NCO
Professional Education System, Specialized
leadership courses, such as Logistics Super-
i o r , are being conducted at the Iraqi Army
Service and Support Institute at Taji, Three
Iraqi Military Academies at Zahko,
Qalachwalan, and Ar Rustimiyah continue to
train future officim.
 The institutional leadership courses are corn-
plemented and reinforced through partnership
with Coalition Military Transition Teams.
These teams, embedded with every Iraqi
battalion, brigade, and division, provide daily
guidance and mentorship. In addition, Iraqi
units are partnered with Coalition force units.
These partnerships, combined with the
expertise and leadership taught through the
institutionalbase, are critical for development
of both unit proficiency and leadership essen-
tial to increased operational effectiveness.
The importance of ethics, human rights, and
leadership in the Iraqi Armed Forces has
engendered a concept for a Center for Ethics
and Leadership to provide institutional over-
sight for ethics education, training, and
~mment,
A promising trend is that military leadership
has become more involved with civic leaders
and sheiks in their areas of operation. This
activity will continue to reinforce and
establish the importance of Iraqis leading and
Force GenerationTImellna
mliningand mining
NY TIKES
taking responsibility for their own security
and interests.
The new Minister of Defense, Abd al-Qadr
Muhammad Jassim al-Mufraji, is confronting
the challenges he faces and is already making
his mark. Previous logjams in acquisitions
and contracting are being eased, and he is
working closely with MNSTC-1 to proceed on
force development, force expansion, and
logistics support. The MOD Transition Team
grew to meet this accelerated pace of business
and expanded to more than 50. half of whom
are Military Professional Resources Incor-
porated contractors. Close and effective
relationships are being forged by team
members with all senior MOD headquarters
officials, and the confidence, and thus
capacity, of these officials is mgthening.
The ministries and the Joint Headquarters are
expected to be in the lead with Coalition
support by the end of 2007. However, a
partnership with these institutions will be
 required through at least the first peaceful
transfer of power in 2010.
MNC-I continues to provide logistical support
to the Iraqi Armed Forces where the =stab-
lished system fails short. Ahhough there has
been some success with Iraqi Army units
using their own processes, there is still a great
deal of institutional development remaining.
MNF-1 is working with both MNC-I and
MNSTC-I 10 aid the Government of Iraq in
developing a defense logistics system, but in
the absence of a self-reliant system, MNF-I
must provide extensive support to Iraqi
forces.
MNSTC-I processed life support contracts in
a total amount of approximately US$7.8 mil-
lion for the months of May and June 2006.
Currently, all life support contracts have been
transitioned to the MOD. MNSTC-I has
formed a Transition Working Group tasked
HY TIMES
wth ensuring that the MOD properly supports
all Iraqi Army life support requirements
DOD requested US$151 million for MOI
sustainmen1 in the FY2007 Budget Amend-
ment request, but did not ask for funding for
MOD sustainment.
Coalition forces are also supponing the
Government of Iraq with fuel. In June 2006,
all Iraqi Army units submitted requisitions for
fuel; MTRs provide the majority of the fuel
distribution. Storage capacity will not be fully
fielded until December. Additionally, the
GSUs will not he fully on-line until March
2007. Until toe MTRs and GSUs are in place,
the Iraqi Anny units will not be fully self-
sufficient in terms of bulk fuel transportation
and storage.
Coalition forces supported the Iraqi Army
units with the combined fuel report listed
below.
 Obstacles to Prowess
I n the Iraqi A m y , approximately 15%
attrition is the norm for initial training. When
a unit is fully trained and employed in combat
operations, some soldiers find that they do not
like the particular location or they cannot
cope with dangers o f the counter-insurgency.
Absent-without-leave rates are typically about
1%-4% for most Iraqi A m y divisions,
although deployments to combat sometimes
cause absentee spikes of 5%-8%. However,
soldiers in units in this final stage o f develop-
mentare less likely to abandon the service. As
with any organization, the units with strong,
competent leaders tend to have higher
present-forduty rates than those with weak
leaders. However, there is currently no judi-
cia1 punishment system within the Iraqi
Army. Therefore, Iraqi Army commanders
have little legal leverage to compel their
soldiers to combat, and soldiers and police
can quit with impunity.
Sectarian Issues
The U.S. Government is committed to crest-
ing an Iraqi military that reflects the ethnic
and religious fabric of Iraq, with diverse units
loyal to the nation and not sectarian interests.
Although competence and merit arc the
deciding factors when selecting recruits,
particularly leaders, the ISF are developing so
that they generally mirror the demographic
make-up o f Iraq. Sectarian lines remain
drawn, however, along geographic lines, with
Sunni, Shi'a, or Kurdish soldiers mostly
sewing in units located i n geographic areas
familiar to their group. These divisions are
even stronger at the battalion level, where
NX TIMES
battalion commanders o f one particular group
tend I n command only soldiers of their o*n
sectarian or regional backgrounds. The
Minister of Defense, through an Officer
Selection Committee, has used the normal
transitions to continue to diversify the senior
leadership in the Iraqi A m y . This continuing
process strives to ensure that the Iraqi Army
is led by competent leaders who are repre-
sentative o f the national fabric. I n the
aggregate, Sunni, Kurd, and Shi'a are well
and appropriately represented i n senior
leadership positions. The Sunni and Kurds are
slightly over-represented, while the Shi'a am
slightly under-represented, though Shi'a
commanders still hold a large majority of
command positions. The percentage of Smni
leaders at each level remains constant. A t the
battalion level, the echelon in which the Shi'a
have the highest percentage o f commands,
they are appropriately represented when com-
pared to the demographics of the Iraqi
population. The relatively high percentage of
Sunni and Kurds in higher-level commands is
a result o f the requirement for experienced
military leaders, o f which few were Shi'a.
Generally, Shi'a and Kurds were excluded
from higher-level positions i n the former
regime. The Kurds, however, benefited from
years o f experience in the Peshmerga.
Nationally recruited Iraqi Army divisions are
otherwise representative o f the ethno-
religious composition of the country. The
even-numbered divisions were originally
formed as National Guard units, with the
intent that these units would serve i n the
respective local regions. The composition of
these units tends to be representative of the
region in which they serve. Over time.
replacements from the national recruiting pool
will increase the diversity ofthese divisions
 3. Transition
3.1 Traasltioning Security Responsibility
P r o c w for Implementine Provincial Ir&
Control
The transfer of security responsibility from
Coalition forces 10 the Government of Iraq is
an obiective of the security track outlined in
the
r n f vo f t a r t S -
Such transfers reflect the capability of the
Government of Iraq to fulfill its sovereign
responsibility in the most fundamental, vital
interest of any stateÑt protect its citizens
and safeguard its territory. As Iraqis take on
more responsibility for security, Coalition
forces will increasingly move to supporting
roles in most areas. This may allow for future
personnel reductions or a delay in previously
scheduled deployments. The Coalition's
t a r y posture on the ground will remain
responsive and flexible. As the security situa-
tion evolves, MNF-I will maintain sufficient
forces on the ground to help Iraq consoiidaie
and secure its gains on many different fronts.
The recent agreement between Prime Minister
al-Maliki and President Bush to increase force
presence in Baghdad is indicative of this
flexibility.
Iraq achieved a historic milestone on July 13,
2006, with the transfer of security respon-
sibility in Muthanna Province from MNF-1 to
the Provincial Governor and civilian-.
trolled Iraqi Police Service. Muthanna is the
first of Iraq's 18 provinces to be designated
for transition to Provincial Iraqi Control,
which represents die successful development
of Iraq's capability to govern and protect
itself as a sovereign and democratic nation.
The joint decision between the Government
of Iraq and MNF-I to hand over security
responsibility is the resuh of Muthanna's
demonstrated ability to take the lead in man-
aging its own security and governance duties
at the provincial level. The transition decision
also reflects a joint assessment of the overall
threat situation in Muthanna, the capabilities
ofthe IPS and the Iraqi Army, and the provin-
cial leadership's ability to coordinate security.
Transition Teams are in place to smooth the
transfer process, and multinational forces
stand ready to provide assistance if needed.
Dhi Qar Province appears to be ready to
assume security independence within the next
45 days, and several other provinces should
meet the transition criteria before the end of
the year. The Government of Iraq and the
MNF-I will continue to transfer security
responsibilities in other provinces as prcrcqui-
site conditions arc met.
In concept, security transition is a four-phased
process.
1. Imvlement Pirtnerahipa, MNF-I and
its Major Subordinate Commands estab
lish and maintain partnerships across
the entire spectrum of ISF units, from
battalion to ministerial level.
2. Iraqi Army Lead ( I A U Process
during which Iraqi Army units progress
through stages o f capability from unit
formation to the ability to conduct
COU~~CT-ins~rgenc) opcranons
3. Provincial I n ~CoitrnI
i (PIQ. Iraqi
c I aJihor.ties satisr\ the conditions
required to assume control and to
exercise responsibility for the security
of their respective provinces.
4. Iraqi Security Self-Reliance. The
Government of Iraq achieves PIC (or a
combination of PIC and 1AL) through-
out Iraq, and the government, through
its security ministries, is capable of
planning, conducting, and sustaining
security operations and forces.
 These phases arc not strictly sequential. For
example, the Iraqi Army does not have to
assume the lead in a province before Coalition
forces may begin transfer of provincial
control. This was the case in Muthanna.
Phase 1 of the security transition concept-
implementing partnerships~is already
complete. As described above, the second
phase, Iraqi Army lead, is well under way in
many provinces. The third phase, establishing
provincial Iraqi control over security, will be
implemented on an area-by-area basis. The
Government of Iraq, jointly with military and
political leadership of the United States and
Coalition partners in Iraq, will assess when
conditions permit handing over security
responsibility for specific areas from Coali-
tion forces to the Iraqi civil authorities. The
Joint Committee to Transfer Security Respon-
sibility (JCTSR) has developed criteria to
guide the transfer of security responsibility.
Recommendations for transfer include an
assessment of conditions in four categories:
I. Threat Assessment
2. ISF Readiness
3. Local Governance Capability
Provincial SçcurttTransmomAtsftsmont (PSTA)
At 01 July 2006
MY TIMES
4. MNF-I Ability to Respond Quickly to
Major Threats, ifNeeded
The recommendation to transfer security
responsibility is based on the specific situa-
t i in any one province or provincial capital
in the context of the overall security environ-
ment. The appropriate Multi-National Force
Division Commander and Provincial Cover-
i r , assisted by representatives of the Iraqi
Ministries of Interior and Defense and U.S.
and United Kingdom Embassies, conduct
monthly assessments of provinces and of
provincial capitals. The JCTSR working
group meets monthly to review the assess-
ments and to present recommendations to the
JCTSR principals regarding which provinces
arc ready to be transferred. Once a decision is
made, the JCTSR working group will provide
oversight of the development of transition
directives, develop a public affairs plan, and
arrange a post-transfer security agreement
beween MNF-I forces and provincial
governors. Every transfer will ensure an
effective and successful handover of security
responsibilities. Moreover, the transition and
reduced presence of MNF-I forces will be
plainly visible to the Iraqi people.
 Jklainee Operations
In June 2006, MNF-I, in coordination with the
Government of Iraq, conducted a large-scale
release of detainees in support of the newly
formed national unity government. The
release sewed as a visible symbol of the gov-
ernment's commitment to national unity and
reconciliation in the progress toward demo-
cratic governance and the rule of law. MNF-I
released 2.500 low-risk detainees over a
period of three weeks. Coupled with the 500
detainees from the normal Combined Review
and Release Board process, MNF-I had a net
reduction of more than 2,000 detainees in
June. A MNF-I special board reviewed
approximately 6.500 records to identify the
low-risk detainees. Each file was also
reviewed by the MNF-I Deputy Chief of Staff
for Intelligence to consider any additional
ntetligence reports. Detainees involved in
violent acts, 1ED rndking/placement, financ-
ing insurgent operations, identified as key
insurgent leaders, or who have been m a p -
mred were not considered for release.
-
Detainee Population 2003 through 2008
HT TIMES
MNf--1has. begun trammg Iraqi guards for a
potential transition of the Coalmion detention
facilities and detainees 'I ransitioning detainee
operations is a three-phase process
I. Phase I consists of individual and
collective training of Iraqi guards and
leaders, including training alongside
their U.S. counterparts inside the
facility.
2. Phase 2 consists of the removal of
U.S. guards and establishment of a
U.S. transition team to supervise Iraqi
Security Forces and to maintain legal
custody of detainees.
3. Phase 3 consists of the final removal
of all U.S. personnel and turnover of
the facilities and legal custody of the
detainees to the Government of Iraq,
The criteria for transfer includes the muire-
ment for the Government of Iraq 10 possess
the legal authority to hold security detainees.
each facility demonstrating the ability to meet
the care and custody standard, and the MOJ
 having effective oversight o f the program.
MNF-1 is currently in Phase 1. Sienificimt
challenges exist to ultimately meeting these
criteria. The Iraqi Corrections System has not
demonstrated the capacity to effectively
resource and run a major facility, such as
Camp Bucca. Additionally, based on the com-
position o f the guard force, serious questions
remain as lo whether they would be able to
maintain the required standards o f care and
custody. The most significant obstacle
remains establishing the legal authority to
hold security detainees. There is widespread
opposition inside the Sunni political leader-
ship 10 providing this authority to the Govern-
ment oflraq.
3.2 U.S. Force Adjistoients
I n consultation with the military commanders
in Iraq, the Government o f Iraq, and Coalition
partners, the Secretary o f Defense continues
to advise the President on the appropriate
level of U.S. forces in Iraq and the surround-
ing theater o f operations based on current
conditions. These conditions include, but are
not limited to, key elements o f the MNF-I
Campaign Pian, such as the increasing
responsibility of the ISF in counter-
insurgency operations and ownership o f areas
o f responsibility and progress in the political
process.
Arbitrary deadlines or timetables for with-
drawal of Coalition forces-divorced from
conditions in Iraq and the region-would be a
serious strategic error, as they would suggest
to the terrorists, the Rejectionists, and the
various illegal armed groups in Iraq that they
can simply wait or stall to win. The absence
of a specific timetable docs not mean that the
Coalition's posture in Iraq is static. On the
contrary, the Coalition continually reviews
the situation in Iraq and adjusts its posture
and approaches as conditions evolve and Iraqi
capabilities grow.
BY TIMES
As security conditions improve and as the ISF
becomes more capable of securing their own
country, Coalition forces will move out of the
cities, reduce the number of bases from which
they operate, and conduct fewer visible
missions. However, they will remain postured
to assist, including supporting the ISF with
transition teams. Although the Coalition
military presence may become less visible, it
will remain lethal and decisive, able to
confront the enemy wherever i t may gather
and organize.
The Coalition retains the ability to quickly
reinforce the Iraqi Army as required and to
provide critical enablers as Iraqis develop
their own capabilities. Coalition personnel
levels will increase, if necessary,to defeat the
enemy or to provide additional security for
key events, like the 2005 referendum and
elections. But the goal, over time, is to reduce
Coalition forces as Iraqis continue to assume
more o f the security and civilian respon-
sibilities themselves. This process is already
under way.
The Government o f Iraq has agreed to form a
Joint Committee with MNF-I and the U.S.
and UK Embassies to develop a conditions-
based roadmap for the full transition of
security responsibility to the ISF. This road-
map will consist o f recommended conditions
intended to lead to the eventual and gradual
withdrawal ofmulti-national forces from Iraq.
The Joint Committee for Achieving Iraqi
Security Self-Reliance (JCAISSR) will base
its roadmap on much o f the successful work
that has already gone into developing the
strategy for transition o f security respon-
sibility in Iraq:
Governance
The sealing o f the new
Government of Iraq's,
based on Its Conalmtlon, sets the conditions
 for continuing progress toward Iraqi security
self-reliance. Toward this end, the govern-
ment's program calls for speeding up plans
for completing the preparation of tile ISF;
speeding up the process of transferring
security responsibilities and powers to the
Iraqi Army, police, and security forces; and
cooperation with the multi-national forces in a
way that will ailow the handover of security
responsibilities to the ISF, the completion of
the mission, and the exit of the multi-national
forces,
Development of the ISF
Efforts to develop the capacity of the ISF
have been successful. In November 2005, the
Iraqi Army had 4 brigades and 23 battalions
in the lead. As of August 7, 2006. the Iraqi
Army has 6 Division Headquarters,
25 brigades, and 85 battalions that have
assumed responsibility. MOI forces also grew
significantly, from approximately 93,000
trained and quipped members in November
2005 to more than 160,000today.
The Government of Iraq and MNF-I have
already developed a conditions-based frame-
work for the transition of security respon-
sibility from multi-national forces to Iraqi
leadership. As a result of this work, security
responsibility for Muthanna Province transi-
timed to the provincial governor on July 13,
2006. Security responsibility for as many as
nine of Iraq's provinces could transition to
Government of Iraq authority by the end of
2006.
The JCAISSR will comprise the Iraqi Prime
Minister, the Iraqi National Security Advisor
(Chair), the Minister of State for National
Security Affairs, the Ministers of Defense and
Interior, the Director of the Iraqi National
Intelligence Service, the U.S. Ambassador,
NY TIKES
the UK Ambassador, and the Commanding
General and Deputy Commanding General,
MNF-I. This committee will be supported by
a working group of direct subordinates.
Conditions recommended by JCAISSR will,
at a minimum, include consideration of the
threat situation across Iraq, security force
readiness, capacity of key security and sup-
porting ministries, and development of the
overall Iraqi national security processes.
MNF-l Basins Ciinmucl
MNF-1 mil efficiently consolidate its foot-
print in Iraq to reduce its military basing
requirements progressively. The MNF-I
basing strategy is an integral part of the
Campaign Plan. MNF-I uses a conditions-
based process to synchronize basing require-
ments with Coalition force structure and
projected command and control structure.
Several factors are considered when employ-
ing this process, including cost-effective use
if resources, maintaining security presence
where required by the mission and
maintaining only those bases required, transi-
tion of operations to the ISF as they continue
to assume the lead in security operations, and
other factors. Specifically, MNF-I seeks to
minimize its presence in major cities while
building the flexibility required to support
other elements in Iraq, including Coalition
partners, PRTs, Transition Teams, Depart-
ment of State activities, and other supporting
units and entities. This process will culminate
in the transition through Operational and
Strategic Overwatch, which will leverage and
maximize support through a minimum
number of strategically located FOBs and
Convoy Support Centers.
As of A u g U 7, 2M6, MNF-I Ins closed 48
of its 110 FOBS, handing over 31 to ISF,
MOD/MOC and 17 to the Minislry of
Finance. Thineen more FOBs are scheduled
for closure and handover by January 2007.
 Strategic Communication Plan
5th Stability and Security Report to Congress
(as of 29 ~ u 06)
g

Bickaround/AnalvsIq Section 9010 of the Department of Defense Appropnabons Act 2006 requires the SECDEF to provide a
quarterly report to Congress that measures the progress toward achieving stability and secunty in Iraq Media attention of the
previous report focused on sectarian violence (high attack trends and casualty stats) opinion polls regarding coalition forces. ISF
ni-ntbeis and operations, and report data in context of events of the day (increase in US troop levels)

Media focus for this quarter's report will likely focus on discussion of civil war, and the rise in attacks and increased CwilianhSF
casualties.

-
Goal: Provide informationto media, Congress, and public that communicatesthe progress Of stability and security operations in Iraq.

OUKtivn:

- Communicate to the public metrics measure progress toward well-established objectives

Communicate that the metrics show progress toward achieving stability and conditions that will enable the withdrawal of coalition

-
forces when conditionswarrant
Communicate that metrics are one aspect of tracking progress within Iraq~progressis often intangible

-
stratbav:
Reinforcemessages and talking points in conjunction with delivering report to Congress
,.,
rn
0s

TODLine M e m a n :
We have a comprehensive and coherent strategy for unity, security and prosperity in Iraq
-The Iraqi security forces are better equipped, better trained and more experiencedthan they were three months ago.
.This metrics report helps us keep congress informed, but it is only one aspect of our assessment for progress in 6aq
Metrics help us achieve our strategy by focusing efforts on accomplishing actions that support a secure, stable Iraq with a
democratic system supported by all Iraqis and accepted by the international community
3 Talkina Points:

!"i There is a qualitativedifference between civil war and sectarian violence, and we are not in a civil war.
5
rn
The majority of Iraq's provinces remain in relative peace. but Baghdad, in particular, draws global attention and is the target for
sensational attacks tnat exaggerate the impact of terrorists illegal armed groups. and violent extremists
Central institutionssuch as the government and security forces are functioning, and violence is geographically defined, not
resulting in the mass movement of population.

.
*This is a decisive time in Baghdad and it requires decisive Iraqi action with our dear support.
In OperationTogether Forward, iraqi security forces, with coalition in support, are focusing on key neighborhoodsin Baghdad.
Since mid-July, statistics measuring levels of vioience have trended down. While a positive indication, it is far too early to call this

.
a continuingtrend
Lots of hard work remains for Coalition forces. Iraal securitv forces, the Iraoi aovernment and the Iraoi ceooie
-The security srtuation is at its most complex state since OIF began, so the results of the stepped up effort wi lake time
Tne Baghdad n Iative s ndial phases demonstrate that the mmbinat on of security forces oovernrnenr action and mooeration
of citizens can accomplish a great deal.
The first truly representativegovernment is in place and dealing with the security issue.
Prime Minister al-Maliki's governmentand Coalitionforces are adapting the Baghdad security plan to meet the changing
conditiansontheground.

id While terrorists and extremists continue to destroy innocent life in Iraq, they have not shaken the determination of the Iraqi people
to build a free country.
+ The political process continues
-
P
0,
M
Polk show Iraqis have confidence in their government to improve the situation (approximately 80% of Baghdad. Kurdish. Mid-
Euphratesand southern citizens said in June they have great deal or fair amount of confidence new Iraqi qov't can improve
situation in Iraq) (p8)
+While the majority of the population is concerned about in increase in sectarian violence, their concern that a civil war might
happen has decreasedsince March (p40)
id Confidence in the iraqi Anny has stayed stable or increased (p43)
id Iraqis must choose to end sectarian strife that has potentialto be self-sustaining

The Iraqi security forces continue to progress

id 5 Iraqi divisions, 25 brigades and 85 Iraqi army battalions are in the lead (32 percent increase since last report)
+ More than 84 percent of MOD end-strength have been trained and equipped
id More than 92 percent of authorized Iraqi Army battalions have been generated
as of 29 Aug 06 2
HY TIMES
 Page 1 of 2

f u b j w t Re: Coilmncf Cal TOMORROW

MEMORANDUM
To: Retired Military Analysts
From: Dallas Lawrence
Director, Community Relationsand Public L
iaison
Office of the Secretary of Defense

Date: August 31,2006

Re: ConferenceCallwith Senior DoD OfEcilb

We invite you to participate in a conferencecall, FRIDAY,Sepftmlur 1,2006. fram
11:4s-n:is.

:
. . .
Assistant Secreterv o.f Defense for International Security Affairs Peter R o b fbio at:
+ice
Director fa StmegJc Plans and Policy Rear Admiral William Sullivan (trio a.
w-.= ~ M u M d y o u
Report on Iraq Stability and Security. This call will be On B d g m d .
m ~ ~ l y

To participate in (bis conferencecall, please dial-rand ask die operator to

connect you la the Analysts conference call.

We hope you are able to participate.

12/3/2007
NT TUBS
1Mi2007
HI TIMES
 Page 1 of 2

To: -&v. OASD-PA

S u m RE: ConferenceCal TOMORROW

rn
I can't make this time because I am on a plane but thanks (of the invite,

Timur J. Eads
Blackbird TechnologiesInc.
13900 Lincoln Park Dr.
Suite 400
h t a M . Va 20171
omce: TIB-UO-11
w1: d

MEMORANDUM
To: Retired Military Analysts

Fro",: Dallas Lawrence

Director. Community Relations and Public Liaison
Office of the Secretary of Defense
Date: August 31,2006

Re: Conference CÈ with Senior DoD Offidab

We inviteyou to participatein a conferencecall,FRIDAY,Seprmber 1,2006,fnim ll:4S-l2:15.

12/3/2007
NT TIMES
 -
Page 2 of 2

Assistant Stcirory of Defense foi !ninnttionaI Security

. . . Affiun Peter R o d m (bid ç

D
&
)I*- wd Vice D M m for
Strategic Plans and Policy Rear Admiral William Sullivan (bio at:
haD;//www.nawimil/naVYdataAÈios/bio.as~?bioID=27 will brief you on the Quarterly Report on Iraq
Stability and Security. This call will be On Background.
To participate in this conference call, please and ask the operatorto connect you to
the Analysts conference call.

We hope you are able to participate.

 Fmfi..
ant
TO:
Su-:
- nunday.AW 31,200a e:37 PM
av. OASD-PA
Re: (no wt$wA)

-
Nooe- rbM In ruddleof an importantconference Don
Page 1 of 1

13/1/2007
SV TIMES
 I'm hoping to get out of a board meeting in time for the call, but I'm not optimistic . . . m y
Eellw beard member^ like to talk, not listen.
. Jack Jaoohm
-
an.Grange MI notbeaUvtobln tancmM8 amfmnca call.

~m-m, -A [mhI
Sent: llutsdaq, Nmust31,ZWS 241 PI4

MEMORANDUM
To:
We invite you to pMicipatc in a canfmnce dl.~ A Y , S e ~ bI ,e2006,fm
r 11:45-12:lS.

we hw ycu arc able to panicipatc.