With the installation of an interim government in Baghdad, President Bush is banking on an untested group of Iraqi officials to achieve results that the U.S.-led occupation could not deliver: security, stability and economic progress.
Iraq's unrelenting violence and bloodshed have thrown a damper on Bush's re-election prospects, raising White House anxieties about the transition of power in Baghdad and the unpredictability of events in the four months until the election.
Security is the most important issue by far, and Bush acknowledges there will be more attacks — not fewer — as terrorists try to undermine the new government.
Despite the political change of face in Baghdad, no one expects Iraq to look any differently in terms of car bombings, suicide attacks and chaos. But with the Nov. 2 election looming, Bush was eager for anything to dispel months of troubling news.
"It's Iraq that keeps the public believing that we're moving in the wrong direction," said Brookings Institution (search) political analyst Thomas E. Mann. "It keeps Bush's approval ratings low. It makes Americans gloomier about the economy than they otherwise would be. It energizes and unifies the Democrats."
The transfer of sovereignty is a key part of Bush's exit strategy, a step to try to convince Americans that he has a plan for eventually extricating the United States from a situation that prominent Democrats have compared with Vietnam.
Bush's poll ratings climbed in December on optimism generated by the capture of Saddam Hussein (search). But Bush slumped in public opinion surveys as Saddam's arrest was followed by a sharp increase in violence, a rise in U.S. casualties, the mutilation and beheadings of hostages and the Abu Ghraib (search) prison abuse scandal.
"When Iraq was going reasonably well at the beginning of the year, Bush's approval ratings were somewhere between 50 and 60 percent. That's in the comfort zone," said Andrew Kohut, director of the Pew Research Center (search). "Now they're in the 40s. That's in the questionable zone."
Indeed, Iraq could be the deciding factor in what is expected to be a close race, according to a variety of pollsters and political analysts.
"If Iraq improves, it will greatly improve Bush's chances of winning," Kohut said. "If it stays bad or gets worse, it will truly imperil his re-election."
Iraq was supposed to be a strong issue for Bush, part of his war against terrorism. He described himself as a wartime commander in chief.
But around the world, the war alienated the United States from allies bitterly opposed to the invasion. Sympathetic feelings toward the United States generated by the Sept. 11 attacks began to evaporate as Bush adopted what was perceived as a go-it-alone approach. "America has never been at a lower point in the minds of citizens around the world," Mann said.
At home, Americans have been shaken by the steadily rising death toll of U.S. soldiers and graphic scenes of violence on television screens.
With 135,000 American troops still in Iraq, responsible for security and with no timetable for withdrawal, the U.S. role stretches indefinitely into the future.
"The fact is that the United States is going to be held responsible in the world for success and failure in Iraq, and it's going to be held responsible over a period of years, not months," said Anthony Cordesman, an Iraq expert with the Center for Strategic and International Studies (search).
He said Iraq faces two scenarios: democracy begins to take hold, the economy improves and Iraq shoulders more of its security responsibilities ... or internal divisions erupt, the new leaders cannot effectively govern or get control of the economy and they fail to manage security forces.
"Whether things are going to get better or worse by the time of the U.S. election is something where, at this point, the best analysts in the world can't do anything more than flip a coin," Cordesman said.
"It is Iraq which basically is undermining what used to be a very strong lead" for Bush, Cordesman said. "If things go sour in Iraq, seriously sour, the president may well lose the election. If things show real progress, then he may well win it."