Bush administration officials continue to deny that a civil war threatens to rip Iraq apart, but some U.S. observers say the country is already headed for a three-state solution and the United States can do little about it.

Last week, Abdel Aziz Hakim, a prominent leader of the largest Shiite political party in the country, the Supreme Council for the Islamic Revolution (SCIRI), called for a separate Shiite region in southern Iraq, one similar to that of Kurdistan in the north.

But soon after, a proposal in the Iraqi parliament to split the country into three autonomous federations was thwarted due to pressure from pro-unity groups. The federalist model is still supported by the United Iraqi Alliance, the largest Shiite bloc in the parliament.

Meanwhile, Kurdistan has been branded "The Other Iraq," in a recent advertising campaign in the United States created by a public relations firm, Russo, Marsh and Rogers, which was hired by the Kurdish government. Kurdistan already had its own government and military before the Iraq war, and largely avoids the bloodshed to its south. Full Kurdish independence from Iraq has long been sought, but it is unclear if or when that will ever happen.

One private analyst said some sort of division seems inevitable.

"The partitioning is already in progress in Iraq — no matter what anybody says," said Tony Sullivan, director of Near East Support Services, a defense consulting firm based in Ann Arbor, Mich. "What is happening in Iraq, I think, is a movement into either orbit — and one may be related to both — of civil war or partitioning."

Violence Threatening Unity

Others say a break-up of Iraq is happening at two levels. Increased sectarian violence has displaced tens of thousands of Iraqis to the sanctuaries of their own ethnic and religious communities. Elsewhere, politically strong Shiite forces like Hakim and SCIRI look at Kurdistan's successful self-rule and see economic and political advantages to forming their own state.

"It is telling that one of the first items up for debate [in the new government] is how to give even greater power for the regional and local governments," said Brian Katulis, public diplomacy expert at the Center for American Progress. "This should come as no surprise to anyone."

He pointed to the Iraqi constitution, passed in October 2005, which calls for a federalist model of government but left open for debate the details on how it would work and how autonomous the regional governments would be.

That debate is clearly hot. Parliamentary factions representing the Sunnis — who are a minority in Iraq and stand to lose in a break-up because their land in the west has none of the oil resources of the Shiite south — joined secular representatives and those loyal to radical Shiite cleric Muqtada al-Sadr in threatening to walk out if the parliament took up the most recent proposal to codify the separate states.

"Federalism is a preliminary step to dividing and separating Iraq," said Adnan al-Dulaimi, head of the Iraqi Accordance Front, the largest Sunni bloc in the parliament. "I call on Iraqis to confront this draft."

But Michael Rubin, a Middle East expert at the American Enterprise Institute who served as a consultant for the U.S.-led transitional government after the 2003 invasion of Iraq, said a federalist system with powerful regional forces may be inevitable.

"One of the big ironies in Iraq is everyone says they want a strongman," via a strong, centralized government, Rubin said. "But in reality, they want a weak central government as possible, and it's going to be a country of regional strongmen."

But how strong, and autonomous, and whether the power will be shared among all groups, is the million dollar question, he said.

"We should be encouraging them to define the role of the federalist government," and in the fairest way possible, Rubin said, "and so far we are dropping the ball."

U.S and Iraq's Neighbors Wary of Partitioning

The Bush administration, however, is not talking about anything but a strong, national government in Iraq. Though the federalist issue was left open in the constitution, any course that leaves Baghdad weak is not supported by the United States, said National Security Council spokesman Frederick Jones.

"We don't believe that is the correct course for Iraq," he said of a three-state solution. "The Iraqi people expressed their desire for a unity government, overwhelming numbers of them came out to vote. ... We believe that is the course that (Prime Minister Nouri) al-Maliki is pursuing and we support [Iraqis] in their efforts."

Experts say Kurdistan's self-rule makes those efforts more difficult. Kurds were particularly brutalized by Saddam Hussein, especially in the late 1980s when he gassed to death 180,000 of them. The Kurds have been governing themselves since the end of the Persian Gulf War and strong sentiment within the region supports breaking off from Iraq entirely.

However, the promise of a federalist system in the constitution and the threat of Iraq's neighbors have so far kept that sentiment in check, said Dave Hartwell, Middle East editor with Jane's Information Group, an international security and intelligence consulting firm.

"The Kurds are probably aware of how far they have come and how far they can push it and are unlikely to see much mileage, at least for the time being, in a policy that deliberately sets out to antagonize virtually every country in the region, not to mention the U.S.," he said.

Ethnic Kurds in neighboring Turkey have a tense relationship with the Turkish government, which sees the growing autonomy of Kurdistan in Iraq a direct threat to keeping a lid on those tensions within their territory, where a separatist movement has led to ongoing violence in the Southeast of that country. Iran, too, sees Kurdistan as a bad example for its own disenfranchised people, say some experts.

"If there is a self-announced, independent, flourishing Kurdistan, the geo-strategic dynamic will be for the Kurds in other countries to seek and break off and join it," said Sullivan. "That is the ultimate Kurdish dream."

He said this would not "only have the effect of disintegrating Iraq," but will put the rest of the Middle East on alert.

At the same time, some analysts accuse Iran of using its influence with the ruling Shiite party in Iraq to push a three-state solution, and say the Bush administration's hopes for a unity government is shrinking as the Iranians gain influence in southern Iraq.

"The Iranians clearly have their intentions," said Reva Bhalla, a geo-political analyst for Strategic Forecasting Inc. (STRATFOR), a private defense intelligence firm.

While a partitioning of Iraq along religious and ethnic lines may ease the sectarian strife there, say some U.S. lawmakers like Sen. Joseph Biden, D-Del., Alex Vatanka, security editor for Jane's Information Group, warned that such a break-up right now could have grave consequences.

"It doesn't necessarily mean the end to the violence," he said, noting that Baghdad, the nation's capital, is home to Sunnis and Shiites and neither group is going to want to leave.

"Given the animosity between the Shia and the Sunni, it would be best to hope for a strong leader or a strong central government in Baghdad and let the people decide for themselves for the long term, what model of government is best for them."

The Associated Press contributed to this report.