By Lennox Samuels 

As recently as last May, American and Iraqi negotiators were at a dead end in efforts to forge a security agreement that would cover withdrawal of U.S. forces. For one thing—an important thing—some opponents of a deal were framing the discussion in terms of the Americans trying to establish a permanent occupying force in the country. When U.S. Ambassador Ryan Crocker and Iraqi Foreign Minister Hoshyar Zebari signed the agreement on Monday, it was a testament to the fact that both sides had reached a point where they were satisfied, if not thrilled, with the final terms. Perhaps more important, it showed that negotiators could read a calendar.

That calendar has an asterisk at Dec. 31, the date the United Nations mandate expires, leaving the U.S. military with no legal basis for being in Iraq. There was much talk that the United States and Iraq would be unable to reach common ground by that deadline, and chatter swirled around possible scenarios for such an eventuality. Would the Americans simply stay on "illegally"? Would the two sides stitch together a temporary pact setting up an extra-legal interregnum? No scenario had the United States packing up its 150,000 troops, plus equipment and ordnance, and leaving. As the deadline loomed, realpolitik set in. Dec. 31 "focus[ed] the mind on what happens the next day if there were no agreement," says a senior U.S. official involved in the negotiations.

A breakthrough came when negotiators began to treat the talks as a framework for establishing a broad bilateral relationship that deals with more than just "the technical matter" of U.S. troop withdrawal, the U.S. official says. Negotiators, who formally began talks last March, say the accord really has two pieces: the much-discussed Status of Forces Agreement and a wider deal on matters that extend beyond war. "This agreement provides the framework for cooperation in the fields of economics, culture, science, technology, health and trade, just to name a few," Crocker said at the signing ceremony. "It reminds us that at a time when United States forces will continue to withdraw from Iraq in recognition of superlative security gains … our relationship will continue to develop in many other ways."

That development will come despite the apparent machinations of Iran. Last month, Gen. Ray Odierno, the U.S. military commander in Iraq, caused an uproar when he charged that Iraq's eastern neighbor was trying to derail the agreement, going so far as to say the country was bribing Iraqi politicians. The allegations outraged Baghdad legislators. "The Iranians have not been unduly involved in any way," an Iraqi government official tells NEWSWEEK. But American officials who will not speak for attribution say the Iranians were among those talking up the threat of a permanent U.S. occupation. "Iran wants to dominate the country in every area," including politics, security and economics, says a second senior U.S. official. Because the Iran-Iraq war ended in 1988 with an Iraqi victory, Iran wants events in 2008 to end in an Iranian victory, the official says.

Even some Iraqis agree that the Iranians have been stoking anti-agreement sentiment. Some point to the exploits of radical Muslim cleric Muqtada al-Sadr, who is studying in Iraq to become an ayatollah and has called for mass demonstrations against the security agreement and warned of renewed fighting by his militia, the Mahdi Army. "He's supported by and working with the Iranians," says an Iraqi journalist who asked not to be identified for security reasons. "Iran doesn't invest millions in supporting these people and not ask for a return." Some Iraqi politicians had talked about running any pact by neighboring countries, taken by most observers to mean Iran, for their input. With an agreement signed, Tehran is among the biggest losers in the regional political skirmishing. Still, Iran may not be done yet—it is likely to lobby Shiite Muslims in Iraq's parliament to reject the agreement, which they are expected to vote on in the next week. Both Iran and Iraq have Shiite majorities.

But most Iraqis and American officials expect the parliament to ratify the agreement, which will then go to the presidency council for a final sign-off. The feeling is that both the United States and Iraq have gotten the best deal they're going to get. "This is in many respects everything we've been working for. The fact that they made tough demands and we made tough demands back was entirely natural," says one of the senior U.S. officials. The American side is well aware that Iraqi factions will spin the agreement in different ways, and to their advantage. Some in the government are already calling it a withdrawal agreement. "How it is marketed by either side is one thing," says the second U.S. official. "What it is, is something else." Public relations aside, Iraq seems poised to move on to the next phase of its political journey