Obama's next big foreign policy crisis: Iraq?

The new concern comes at a time when some close observers of Iraq — including two former senior government officials who focused on Iraq and who recently spoke with TIME — say they’re cautiously optimistic that Iraq’s political actors can work together. Recent tensions between Iraqi Kurds and Arabs have cooled of late, for instance. And one of the officials argued that recent provincial-election defeats for Nouri al-Maliki’s State of Law Coalition may have chastened a Prime Minister who has ruled with a dangerously heavy hand, infuriating Iraq’s Sunnis by favoring his fellow Shi‘ites.

The growing promise of oil wealth may also be providing an incentive for dueling factions to cooperate, this official says. Iraq plans to boost oil production by nearly one-third over the next year — a boon for the U.S. because Iraq’s oil production counters Iranian crude blocked by sanctions, thereby limiting global price hikes.

But the hopeful talk will die fast if al-Qaeda militants can ignite a vicious new cycle of Sunni-vs.-Shi‘ite violence. “They have been hitting Shia civilians,” says Jessica Lewis, a former army intelligence officer in Iraq now with the Institute for the Study of War. “We’re seeing Shi‘ite militias forming” in response…

With violence rising, some Iraqi leaders who bade America good riddance in late 2011 are now asking Washington for help. “The Iraqis sort of kicked us out,” says Katzman. “A lot of the [security] programs we hoped to continue, they basically discontinued. Now the Iraqis are getting nervous because of AQI, and they want us back again.”