Report to Congress 

Submitted pursuant to U.S. Policy in Iraq Act, 

Section 1227 of the National Defense 

Authorization Act for Fiscal Year 2006 

(PL 109-163) 

APRIL 6, 2006
 Report to Congress 

Submitted pursuant to U.S. Policy in Iraq Act, Section 1227 (c) of the 

National Defense Authorization Act for Fiscal Year 2006 (PL 109-163) 

April 6, 2006 

Table of Contents 

Introduction..................................................................................................... 3 

I. The current military mission and the diplomatic, political, economic, 

and military measures that are being or have been 

undertaken...................................................................................6 

(A) Efforts to convince Iraq’s main communities to make the 

compromises necessary for a broad-based and sustainable 

political settlement...................................................6 

(B) Engaging the international community and the region in 

efforts to stabilize Iraq and to forge a broad-based and 

sustainable political settlement.....................................9 

(C) Strengthening the capacity of Iraq’s government 

ministries...............................................................10 

(D) Accelerating the delivery of basic services.....................12 

(E) Securing the delivery of pledged economic assistance from 

the international community and additional pledges of 

assistance............................................................14 

(F) Training Iraqi Security Forces and transferring additional 

security responsibilities to those forces and the Government of 

Iraq.......................................................................................16 

II. Whether the Iraqis have made the compromises necessary to achieve 

the broad-based and sustainable political settlement that is essential 

for defeating the insurgency in 

Iraq.............................................................................17 
2

III. Any specific conditions included in the April 2005 Multi-National 

Forces – Iraq campaign action plan and any subsequent updates to 

that campaign plan that must be met in order to provide for the 

transition of additional security responsibility to Iraqi Security 

Forces........................................................................l9 

IV. Additional information on military, policy, and security forces: 

(A) The number of battalions of the Iraqi Armed Forces that must 

be able to operate independently or to take the lead in 

counterinsurgency operations and the defense of Iraq’s 

territory...............................................................20 

(B) The number of Iraqi special police units that must be able to 

operate independently or to take the lead in maintaining law 

and order and fighting the insurgency.............................21 

(C) The number of regular police that must be trained and 

equipped to maintain law and 

order.....................................................................22 

(D) The ability of Iraq’s Federal ministries and provincial and 

local governments to independently sustain, direct, and 

coordinate Iraq’s security.........................................23

V. The criteria to be used to evaluate progress toward meeting such 

conditions...................................................................24 

VI. A plan for meeting such conditions, an assessment of the extent to 

which such conditions have been met, information regarding 

variables that could alter that plan, and the reasons for any 

subsequent changes to that plan..........................................25 
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Introduction 

This report is submitted consistent with section 1227 of the National 

Defense Authorization Act for Fiscal Year 2006 (Public Law 109-163) 

concerning United States Policy in Iraq. The Report covers current military, 

diplomatic, political, and economic measures that are being or have been 

undertaken to complete our mission in Iraq successfully. The Report is 

organized into the following areas: (1) current mission and measures taken 

to support it; (2) Iraqi progress towards a sustainable political settlement; (3) 

conditions necessary for a transfer of security responsibility; (4) Iraqi 

Security Forces capacity and readiness, which contribute to the transfer of 

security responsibility; (5) criteria used to evaluate progress in that area; and 

(6) our plan for successfully completing the mission. 

As outlined in the National Strategy for Victory in Iraq (NSVI), our 

strategy is to “help the Iraqi people build a new Iraq with a constitutional, 

representative government that respects civil rights and has security forces 

sufficient to maintain domestic order and keep Iraq from becoming a safe 

haven for terrorists. To achieve this end, the United States is pursuing a 

comprehensive approach that involves the integrated efforts of the entire 

United States Government, the Iraqi Government, and coalition 

governments, and that encourages the active involvement of the United 

Nations, other international organizations, and supportive regional states.” 

As noted in the NSVI, our approach outlines goals and measures progress 

along three tracks – political, economic, security. These three tracks move 

forward simultaneously and successes in each are mutually reinforcing. 

Building on the foundation of two prior electoral successes, the 

January 30, 2005 elections for a Transitional National Assembly (TNA) and 

the October 15, 2005 constitutional referendum, over 12.2 million Iraqi 

voters (78 percent of eligible voters) went to the polls again on December 

15, 2005 to elect a Council of Representatives (CoR), the first step in the 

formation of a government under Iraq’s new constitution. Iraqis braved 

threats and intimidation to exercise their right to vote to determine their 

government, despite a climate of violence in which terrorists and insurgents 

sought to undermine Iraq’s economy, security, and political process. 

The Independent Electoral Commission of Iraq (IECI) certified final 

election results February 10, 2006. With the announcement of final, 
4

certified results, political parties and leaders entered negotiations to form the 

executive branch of a new Iraqi government. The U.S. remained actively and 

constantly engaged in supporting the desire of Iraqis for the speedy 

formation of an inclusive, national unity government that serves the interests 

of all Iraqis. 

Progress on government formation continued despite an upsurge in 

sectarian violence that stemmed from the February 22, 2006 bombing of the 

Golden Mosque in Samarra. Those who attacked the Golden Mosque sought 

to exploit divisions among the Iraqi public and the political leadership to 

start a civil war. Iraqi government and religious leaders alike, in a 

demonstration of national unity, condemned the attacks and called for an end 

to sectarian unrest, and for security forces free from sectarian and militia 

loyalties. They also reaffirmed their commitment to the political process. 

The U.S. and international community joined Iraq in denouncing the attacks 

and underscored the importance of national unity and defying the terrorists 

and extremists who seek to provoke such conflict. 

Despite concerted efforts by terrorists and insurgents to derail 

assistance efforts, there was measurable progress along the economic track. 

Iraq’s economy grew from $18.9 billion in 2002 to $33.1 billion in 2005. 

The International Monetary Fund (IMF) estimates that the real gross 

domestic product (GDP) grew by 2.6 percent in 2005, and expects real GDP 

to grow by 10.4 percent in 2006. While the Iraqi economy continued to be 

overwhelmingly dependent on oil exports, which accounted for 

approximately two-thirds of GDP and over 95 percent of government 

revenue in 2005, other sectors began to pick up activity, including the 

services and trade sectors. International economic assistance came primarily 

from the United States1, but also from other international partners, who 

pledged $13.5 billion in economic aid. This international aid has been 

critical to helping boost overall Iraqi economic growth and rehabilitate its 

infrastructure, which in 2003 (i.e., before the insurgency and before the 

international community had a better understanding of the true dilapidated 

state of Iraq’s infrastructure) the World Bank estimated would cost about 

$55 billion. U.S. assistance efforts will continue to transition from a primary 

 

1

 To date, Congress has appropriated $20.9 billion for relief and reconstruction programs in Iraq through

IRRF 1 and IRRF 2. In addition, Congress has appropriated $1.3 billion for the Commanders Emergency 

Response Program (CERP), $710 million for training and equipment, and $5.4 billion for the Iraqi Security 

Forces Fund (ISFF). The President has also recently requested $5.6 billion in his FY 2006 supplemental 

request and $771 million in the FY 2007 budget request for additional programs to support Iraq’s 

development, transition to self-reliance, and security forces. 
5

focus on reconstruction projects to stabilizing areas of conflict, accelerating 

economic growth, and building Iraq’s capacity to manage its own affairs. 

Ongoing U.S. assistance projects will help Iraq enact the economic reforms 

it needs to sustain long-term growth, including the commitments under its 

IMF Stand-By-Arrangement, and the reforms needed to join the World 

Trade Organization. 

Developing effective national and provincial governance in Iraq is a 

key component of Iraqi self-reliance and defeating the insurgency. The new 

Constitution devolves more responsibility to the governorates (provinces): 

Provincial Reconstruction Teams (PRTs) provide a crucial link between 

national and provincial capacity-development efforts. PRTs are designed to 

provide training and development efforts at the national level, complement 

them at the provincial level, and provide a link between provincial-level and 

national level efforts. Four PRTs are currently operational, including 

Kirkuk, Mosul, Babil and the recently launched Baghdad PRT. Additional 

PRTs may be put in place; as many as eight would be U.S.-led, with the 

others led by coalition partners or Iraqis. The UK and Italy agreed to lead 

PRTs in Basrah and Dhi Qar, respectively. These Coalition-led PRTs would 

follow a functional structure similar to those led by the U.S. Other coalition 

partners expressed an interest in leading or participating in PRTs in other 

provinces. 

The UNSC-endorsed Multi-National Force–Iraq (MNF-I) leads the 

efforts on the security track. The military mission in Iraq is essential to the 

realization of the President’s integrated goal of an Iraq that is peaceful, 

unified, stable, democratic, and secure. The Multi-National Security 

Transition Command-Iraq (MNSTC-I) continues to train, develop, and 

contribute to the readiness of Iraqi Security Forces (ISF), to include forces in 

the Ministries of Defense and Interior. Iraq is making steady progress in 

meeting the President’s short-term and medium-term security goals: fighting 

terrorists and neutralizing the insurgency, standing up robust forces loyal to 

the legitimate Iraqi government, and having Iraqi forces assume increasing 

security responsibilities and control over battle space. 

While MNSTC-I is making progress training and equipping the ISF, 

and the ISF are assuming increased security responsibilities, there is no 

deterministic relationship between increasing numbers of trained and 

equipped Iraqi forces or increasing control of battle space by Iraqi units and 

any associated drawdown of U.S. forces. Success in Iraq is a U.S. vital 
6

interest and supporting both the building of ISF and fostering a secure 

environment must continue in order to achieve our strategic objectives. The 

appropriate level of U.S. forces in Iraq will continue to be based on existing 

political, economic, and regional conditions and the security environment. 

Efforts in the political, economic, and security tracks are part of an 

integrated strategy by which the U.S. government, together with the 

international community, is helping Iraq build a new nation with a 

constitutional, representative government that respects human rights and has 

security forces sufficient to maintain domestic order and keep Iraq from

becoming a safe haven for terrorists. 

I. The current military mission and the diplomatic, political, economic, 

and military measures that are being or have been undertaken to 

successfully complete or support that mission: 

In fulfillment of its mandate under United Nations Security Council 

Resolution (UNSCR) 1546 and extended by UNSCR 1637, MNF-I, in 

partnership with the Iraqi government, conducts full-spectrum

counterinsurgency operations to isolate and neutralize the enemy. MNF-I 

also organizes, trains, and equips Iraqi Security Forces (ISF) in order to 

create and maintain a security environment that permits Iraq’s political and 

economic development. 

(A) Efforts to convince Iraq’s main communities to make the 

compromises necessary for a broad-based and sustainable 

political settlement; 

The United States continued to engage with Iraqi political, religious 

and civil society leaders to encourage the formation of a government of 

national unity that will yield a sustainable national compact for governance. 

The National Strategy for Victory in Iraq (NSVI) promotes a national 

compact as a means to divide terrorists opposed to the political process from

insurgents willing to stop fighting and participate in Iraq’s political process; 

to engage and expand opportunities for all Iraqis to participate in the 

political process; and to build effective and stable national institutions that 

will facilitate Iraq’s full integration into the international community. As 

this Report explains in more detail below (Section II) these efforts have been 

part of a consistent strategy to expand political participation and build 

consensus on issues that have long divided Iraqi communities. Expanding 
7

political space for all groups to participate, and encouraging Sunni 

participation in a new democratic process has been a long-term effort, and it 

has made available the opportunity for the creation of a unity government 

that fairly represents all Iraqis. 

Efforts over the past year focused on empowering the transitional 

government, ensuring the ratification of a democratic constitution, and 

creating the conditions for large voter turnout across Iraq when elections 

were held under that constitution. These efforts included active and direct 

engagement from the highest levels of the United States Government. They 

also included focused military operations to create the security environment 

that is necessary for political expression. The result is a political process 

that now includes all of Iraq’s major communities for the first time. 

The Iraqi constitution, which passed by more than 80 percent of 

approximately 11 million voters, was another historic achievement that is 

now guiding government formation talks. Though some commentators 

noted that constitution was not passed with broad support of Iraq’s Sunni 

community, those commentators failed to understand the structure of the 

document and the space it provided for all groups to work together. The 

government formation process, for example, requires a two-thirds supermajority in the Council of Representatives for appointment of key posts. 

This means that all electoral lists must work together, negotiate, and 

compromise to get a constitutional outcome. Such a requirement has 

established the structure through which Iraqis are now working to form a 

unity government. Though the Iraqis themselves produced this key 

provision, the United States throughout last summer and fall helped facilitate 

agreement on it and other key provisions – whether on religion, oil 

allocation, or federalism.2 

 Iraq is now in the midst of government formation negotiations, 

facilitated by the United States in an active and sustained manner. The 

Iraqis must follow their constitutional requirements and stand up a 

government as soon as possible. The United States has made this clear in all 

appropriate channels. In the past six weeks alone, for example: 

 

2

 The United States also helped facilitate an amendment package by which Iraq’s newly elected parliament

can revisit certain provisions over the course of 2006. This secured endorsement of the constitution by

Iraq’s largest Sunni party, the Iraqi Islamic Party. The U.S. intends to work closely with the Iraqis in the 

coming months, whether through constitutional review or through the vital pieces of legislation that must 

be enacted to implement the constitution to build an enduring national compact. 
8

• The United States worked intensively with Iraqi national political and 

religious figures to secure forward progress on a national government 

program and a national unity government. Broad agreement on a 

unity government program will be instrumental to any sustainable 

political settlement. 

• Beginning immediately after the final confirmation of vote results, 

Embassy Baghdad hosted Iraqi leaders to focus immediate attention 

on the formation of a unity government, including promoting the 

selection of candidates who will be able to build consensus and 

possess the professional competence to be effective leaders who 

govern from the center and not from ideological extremes. 

• On February 20, Embassy Baghdad delivered a message to Iraq’s 

political leadership, emphasizing the importance of an inclusive

government with ministries that are not controlled by sectarian 

interests. 

• Embassy Baghdad repeatedly stated that key ministries must be in the 

hands of those who would unify Iraq and not seek to divide it based 

on sectarian agendas and that discussions of government formation 

should not be focused on the distribution of posts, equities, and the 

entitlements of individuals. 

• Following the February 22 Golden Mosque bombing, Embassy 

Baghdad immediately reached out to Iraqi political leaders, calling for 

them to join together in unity and turn away from sectarian violence. 

• The President also called Iraqi leaders from all major political parties 

to express support for a unity government and thank them for their 

leadership. Ambassador Khalilzad spearheaded a meeting of all major 

political leaders February 25 that condemned the sectarian violence. 

• Iraqi political and religious leaders responded in a demonstration of 

unity and a public commitment to move forward with progress on 

reaching consensus. 

• Secretary of State Rice and UK Foreign Secretary Straw traveled to 

Baghdad on April 2 to meet with Iraqi officials and urge consensus 

among Iraq’s political leaders on the prompt formation of a unity 

government. 

These efforts are continuous and ongoing. We expect to see rapid and 

substantial results in the government formation process in the near future. 
9

(B) Engaging the international community and the region in 

efforts to stabilize Iraq and to forge a broad-based and 

sustainable political settlement; 

The United States is committed to working with the Iraqi government 

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 is essential to help Iraqis forge a broad-based and 

sustainable government. 

The involvement of the international community remained steady, and 

the U.S. promoted the normalization of diplomatic relations between Iraq 

and its regional neighbors, as well as with the larger international 

community. Along with the EU, the United States helped organize the June 

2005 Brussels Conference, attended by nearly 80 countries and international 

organizations, which helped establish a new spirit of international 

partnership with Iraq. In an effort to engage more Arab support for Iraq, the 

Secretary of State’s Special Coordinator for Iraq initiated intensive 

consultations with key Arab states. The Secretary of State, the U.S. 

Ambassador to Iraq, and other senior officials have also encouraged Arab 

support for Iraq. The U.S. built on and supported initiatives such as those by 

the Arab League, which sponsored a preparatory meeting in November 2005 

for a national accord conference later this year in Iraq. The Arab League 

meeting resulted in a call for all Arab states to cancel or reduce debt owed to 

them by Iraq, increase assistance, and enhance their diplomatic presence in 

Iraq. 

In addition to the 35 nations who contribute to stability and security 

operations in Iraq, which include the U.S., MNF-I members, and NATO, the 

larger international community continued in a spirit of partnership, both in

the political and economic arenas, to support Iraqi government institutions 

and the Iraqi economy. The U.S. helped to identify expanding and changing 

roles for international partners, such as securing or encouraging 

commitments by the United Kingdom, Italy, and others international 

partners in the PRT effort. The U.S. also raised awareness of the need for 

the international community to call publicly for an end to violence, support 

the political process, disburse pledged assistance, provide debt relief, and 

make additional contributions to Iraq’s economic reconstruction and 

development. 
10

The United Nations Assistance Mission to Iraq (UNAMI) remained 

integrally involved in Iraq and provided technical assistance to the electoral 

processes and constitutional development, as well as other areas including 

humanitarian assistance and donor coordination. The U.S. remained 

engaged in discussions with the United Nations, urging continued support 

for the political process and an enhanced presence supporting expanded 

activities in Iraq. The U.S. also continued to encourage an expanded World 

Bank presence in Iraq. 

(C) Strengthening the capacity of Iraq’s government ministries; 

Under the Iraq Relief and Reconstruction Fund (IRRF) I and II, the 

U.S. has funded advisory support and projects providing Iraqis with training 

and technical assistance to improve their capacity in accomplishing core 

government functions. The ongoing work of the Iraq Reconstruction 

Management Office (IRMO) senior consultants across all sectors is a critical 

facet of the reconstruction effort, as are continuing and ongoing USAID 

programs. Senior consultants provide strategic guidance for institutional 

capacity building within ministries in addition to overseeing and 

coordinating the implementation of IRRF-funded projects in conjunction 

with specific ministries and staff. These projects and programs include: 

assisting the Ministry of Finance in preparing and implementing banking 

and financial reforms; helping the Ministry of Trade in preparing documents 

necessary to be considered for accession into the World Trade Organization 

(WTO) and establishing an investment promotion agency; assisting the 

Ministry of Labor and Social Affairs in developing a social safety net and 

viable pension system; providing assistance to the Ministry of Agriculture in 

the development of a national water strategy, and implementing pilot 

programs in wheat and animal husbandry; improving the institutional 

capacity of the Ministry of Health to provide care and fight disease; and 

developing an Education Management Information System for the Ministry 

of Education to improve management of human and physical resources. The 

U.S., through work done by USAID and the Project and Contracting Office 

(PCO) also dedicated significant resources to rehabilitating and building new 

infrastructure, while working alongside the staff at the Ministries of 

Electricity, Public Works and Water, Water Resources, and Oil in improving 

the ability of their national, regional, and local staff to operate and maintain 

USG-funded facilities, systems, and equipment on a sustainable basis. 
11

While all of these activities improved the capacity at various levels of 

Iraqi ministries to manage their own portfolios, it became increasingly 

apparent that the U.S. needed to provide more resources through a broader 

program directly focused on improving the capacity of key ministries to 

carry out core functions, such as strategic planning, budgeting, managing a 

personnel system, and training.

To address that need, the U.S. designed a National Capacity 

Development Program (NCDP), which will help the new Government of 

Iraq strengthen the core functions necessary for the efficient administration 

of its key national ministries (i.e., Finance, Electricity, Oil, Municipalities 

and Public Works, Water Resources, Planning, Justice and Agriculture), the 

Prime Minister’s Office, Inspectors General of the participating ministries, 

and anti-corruption organizations such as the Commission on Public 

Integrity (CPI) and the Board of Supreme Audit (BSA). The list of key 

ministries and institutions covered by the NCDP will be finalized after 

consultation with the new Iraqi government, once formed, and may expand 

or contract, contingent upon the availability of USG funding and the interest 

of other donors in helping to provide some assistance as well. 

The State Department notified Congress in December 2005 of its 

intent to reallocate $25 million to a new project code under the IRRF to 

begin this program. In the President’s FY 2006 supplemental request, the 

Administration requested an additional $125 million in Economic Support 

Funds (ESF) for ministerial capacity building. The Supplemental also 

includes a $13 million request for Treasury Department technical assistance 

specific to the Iraqi Ministry of Finance and the Central Bank of Iraq. The 

President’s FY 2007 budget request also includes $25 million for these 

capacity building programs through FY 2007. 

The United States continues to work with other donors to coordinate 

efforts with Iraq. Donors such as the European Commission and 

development institutions such as the World Bank have expressed interest in 

supporting similar initiatives with related ministries. 
12

(D) Accelerating the delivery of basic services; 

 

Reconstruction has faced security challenges on the ground, which 

have driven up the cost of doing business, both in terms of financial costs 

and human resources. Despite this and other unanticipated challenges, we 

have been successful in rehabilitating water and sewage services and 

immunizing children against childhood diseases. Work in the oil and 

electricity sectors, however, has been challenged by several ongoing factors: 

(1) Decades of Saddam’s mismanagement, corruption, decay and wars took 

their toll, and led to dilapidated and insufficient infrastructure and poor 

maintenance practices that continue to hamper output; (2) targeted attacks on 

Iraq’s infrastructure by terrorists who seek to undermine the Iraqi 

government and call into question its ability to provide essential services for 

the Iraqi people; and (3) in the case of electricity and fuel, dramatic 

increases in demand, driven by the liberalization of border trade and 

increased salaries of Iraqis but unchecked by the implementation of rational, 

market-based pricing. U.S. assistance programs helped to build or refurbish 

the basic infrastructure that will enable Iraqis to significantly expand the 

delivery of basic services. In addition to ongoing projects, this expansion 

will be further enhanced by improvements in Iraqi capacity, subsidy, and 

pricing reforms and a decrease in infrastructure attacks. 

Under the IRRF, the U.S. programmed $4.2 billion for electricity, 

$2.1 billion for water, $1.7 billion for oil, $739 million for health services 

and $99 million for education. The initial focus of these activities was to 

restore large plants neglected by the former regime, with the expectation that 

rehabilitating existing water and electricity plants and/or building new plants 

would create an initial injection and a stable base for Iraq’s economic 

growth for years to come. Most of these projects are well underway, and 

almost all of the large infrastructure projects are expected to be completed 

by the end of calendar year 2006. These projects are already having a 

significant impact on the lives of average Iraqis. IRRF projects have added, 

rehabilitated or maintained more than 2,700 megawatts (MW) of electricity 

generation capacity on the grid, increasing feasible generation capacity by 

30 percent; improved access to fresh water, benefiting 3.1 million Iraqis; and 

improved access to sewage, benefiting 5.1 million Iraqis. Approximately 32 

percent of Iraq’s 14,121 school buildings were rehabilitated or refurbished, 

36,000 teachers have been trained, and 8.7 million new textbooks were 

provided to Iraqi school children. It is also estimated that nearly all Iraqi 

children have been inoculated against crippling diseases such as polio and 
13

measles, and hundreds of health clinics throughout Iraq have been 

rehabilitated. 

While these achievements are impressive when viewed in the current 

context, initial hopes and projections were higher, but the security 

environment, insurgent and terrorist attacks against critical infrastructure 

components and on-going projects have reduced the impact of IRRF projects 

on improving basic service delivery. 

The process of IRRF close-out has begun, and almost all IRRF 

infrastructure projects will be completed by the end of 2006. More than 

$16.3 billion of the total $18.4 billion of IRRF II has already been obligated, 

in addition to all of the $2.5 billion in IRRF I. For remaining funds, the 

administration is focusing on programs to improve Iraqi capacity to carry out 

core government functions, based on lessons learned to ensure maximum 

effectiveness of the remaining funding. In particular, greater emphasis is 

being placed on projects that: 

• are issued under fixed cost contracts, as opposed to the design/build 

contracts; 

• use direct contracting with Iraqi ministries and Iraqi firms; 

• focus on delivery of the services to end users and Iraqi citizens; 

• are smaller and provide more immediate and visible impacts; 

• increase resiliency and redundancy of infrastructure to enhance its 

integrity; 

• recognize the importance of operation and maintenance; and 

• build Iraqi capacity. 

Involvement of large multi-national firms has been reduced and more 

work directed to Iraqi firms that have proven to be successful contractors. A 

“cost-to-complete” system was instituted to ensure sufficient funds are 

available to complete projects in the future. The program is continually 

adapted based on experience and the dynamic Iraq environment to ensure 

responsible and effective use of the limited resources to achieve lasting and 

tangible results. 

In keeping with that concept, the United States continues to work with 

Iraq to improve its ability to sustain critical infrastructure. The USG 

allocated $180 million of IRRF to support these efforts in specific sectors 
14

($110 million in the water sector, $61 million in the electricity sector, and $9 

million in the combined areas of communications/transportation/health) to 

help Iraq sustain its infrastructure. An initial $121 million had previously 

been allocated to the electricity sector to support sustainable operations for 

generation facilities, which increased funding for sustainment of projects in 

the electricity sector total to $182 million. In addition, USAID is 

completing a $25 million program to improve operations and maintenance in 

12 water and sewage treatment plants. These programs are expected to have 

a significant impact on the long-term viability of existing infrastructure and 

in keeping these Iraqi plants online, thereby improving the levels of service 

offered to average Iraqis. The Administration requested $355 million in the 

FY 2006 supplemental and $154 million in the FY 2007 budget request to 

continue both sustainment and capacity development efforts at the plantlevel, providing a more comprehensive program to help Iraq maintain its 

essential service infrastructure for years to come. 

(E) Securing the delivery of pledged economic assistance from the 

international community and additional pledges of assistance; 

The United States is working very closely with Iraq and international 

donors to maximize international reconstruction assistance. At the October 

2003 Madrid International Donors’ Conference, donors other than the 

United States pledged over $13.5 billion in assistance. This includes $8 

billion in assistance from foreign governments and up to $5.5 billion in 

lending from the World Bank and International Monetary Fund (IMF) to be 

disbursed over four years (2004-2007). 

As of April 2006, over $3.5 billion of the pledges of non-U.S. 

assistance has been disbursed. Approximately $2.7 billion of this was from

other governments either in bilateral projects or through the World Bank and 

the UN-administered International Reconstruction Fund Facility for Iraq 

(IRFFI), and the remainder was from multilateral institutions. Donor 

government “disbursements” are defined here as the funds having left donor 

government treasuries. Because, however, much of the assistance is being 

channeled for implementation through the IRFFI trust funds, contractors, 

NGOs, international organizations, and Iraqi institutions, there is normally a 

lag time between disbursement by the donor and impact on the ground in

Iraq. In addition, the security situation inside Iraq contributed to delays and 

reduced donor presence on the ground. There are currently 93 IRFFI 
15

projects (83 UN, 10 World Bank) in various stages of completion in the 

water, electricity, education, health, and other sectors. 

In addition, the IMF approved $436 million in balance-of-payments 

support through its Emergency Post-Conflict Assistance (EPCA) program in 

September 2004. It approved a $685 million precautionary Stand-By 

Arrangement for Iraq in December 2005. 

The Government of Iraq sets the priorities for reconstruction and 

assistance programs. The United States and other donors work closely with 

the Iraqi government and with each other to ensure that the projects and 

programs are not duplicative, and that they are integrated with the Iraqi 

government’s development planning. Since the Madrid conference in 2003, 

there have been four meetings of the IRFFI Donors’ Committee, which have 

been instrumental in improving donor coordination.

Reduction of Iraq’s external debt burden to sustainable levels, another 

top priority for Iraq’s economic development, is a key component of U.S. 

donor coordination. In November 2004, the Paris Club group of creditors 

agreed to forgive, in phases, 80 percent of approximately $40 billion in Iraqi 

debt held by its members. As of March 2006, 16 of 18 members of the Paris 

Club have signed bilateral debt agreements with the Iraqis implementing the 

2004 agreement. The U.S. itself went beyond Paris Club terms and has 

forgiven 100 percent of the $4.1 billion in U.S.-held Iraqi debt. In total, over 

$30 billion in Iraqi debt either has been forgiven, or will be, by Paris Club 

countries, provided Iraq meets agreed-upon conditions (i.e., successful 

completion of three years under a program with the International Monetary 

Fund, (IMF)). Some non-Paris Club members also have provided debt relief 

on Paris Club or better terms. The U.S. continues to encourage all non-Paris 

Club countries to provide debt reduction to Iraq at terms at least comparable 

to those offered by the Paris Club. Iraq has also made excellent progress in 

dealing with its commercial external creditors on Paris Club terms. Of its 

approximately $22 billion estimated total commercial debt, creditors 

accounting for about $18.4 billion worth have accepted offers at Paris Clubcomparable terms, which will result in approximately $14.7 billion in debt 

reduction. Efforts to reconcile and achieve Paris Club-comparable debt 

relief for the remaining amount continue. 

The United States, in coordination with the Iraqi government, actively 

encourages its international partners and allies to make new pledges of 
16

assistance, including debt relief, and, bilateral or multilateral aid, as well as 

to disburse existing pledges. The U.S. is in regular high-level and workinglevel contact with current and prospective international donors. Since 

January, new IRFFI pledges include 200 million Euro (approximately $240 

million) from the European Commission and $10 million from Germany, 

$2.38 million from Spain, and $0.99 million from New Zealand. On 

November 29, 2005, the World Bank Board approved the first concessional 

loan under its “International Development Association” (IDA) program, the 

first World Bank loan to Iraq in over thirty years. The $100 million IDA 

education project, which is part of the $500 million IDA funds for Iraq 

approved by the World Bank board in September 2005, will help the 

Government of Iraq alleviate school overcrowding and lay the groundwork 

for educational reform. On March 28, Japan announced $655 million in 

concessional yen loans for three projects: Umm Qasr Port Rehabilitation; 

Irrigation Sector Development; and Al-Mussaib Thermal Power Plant 

Rehabilitation. The loans will be finalized with the new Government of 

Iraq. 

(F) Training Iraqi Security Forces and transferring additional 

security responsibilities to those forces and the government of 

Iraq. 

Progress in the development of Iraqi Security Forces (ISF) is 

measured through a variety of indicators that include: the number of trained 

and equipped ISF personnel; readiness assessments of operational units; and 

ISF progress in assuming control of battle space, or area of tactical 

responsibility, within Iraq. MNF-I continues to support and assist the ISF as 

they move towards the capability for fully independent operations and 

security self-reliance. 

Key measures of training progress include: 

• Continued increases in the numbers of individuals trained, equipped, and 

formed into operational units: As of March 20, U.S. and coalition forces 

have trained and equipped more than 111,000 soldiers, sailors, and 

airmen. More than 89,000 police have been trained and equipped. Police 

work alongside 41,700 other Ministry of Interior forces, such as the 

National Police (formerly the Special Police). Overall, over 240,000 

Ministry of Defense and Ministry of Interior forces have been trained and 

equipped. 
17

• Continued increases in unit readiness and ability to take the lead in 

combat operations against the insurgents: As of March 20, 102 Iraqi 

Army regular and special operations battalions are conducting counterinsurgency operations. Sixty-two of these battalions are able to lead in 

such operations. There are 27 National Police Force battalions (formerly 

the Special Police Forces) and one Emergency Response Unit conducting 

combat operations. Seven of the National Police battalions and the 

Emergency Response Unit are able to lead such operations. 

• Progress in assuming responsibility for their battle space: As of March 

20, forty-nine Iraqi Army battalions now control their own battle space. 

Iraqi units have primary responsibility for 65 percent of Baghdad. 

The Secretary of Defense’s quarterly report to Congress, “Measuring 

Security and Stability in Iraq,” provides more extensive measure and 

indicators of the training and performance of ISF and of the security 

environment more generally. 

II. Whether the Iraqis have made the compromises necessary to achieve 

the broad-based and sustainable political settlement that is essential for 

defeating the insurgency in Iraq. 

The Independent Electoral Commission of Iraq (IECI) certified final 

results for the December 15, 2005 election February 10, 2006. The final 

results suggest that Iraqi politics reflect ethnic/sectarian identities – 

principally Kurdish, Sunni Arab, and Shi’a. The Arab Shi’a-based United 

Iraqi Alliance (UIA) won 128 seats in the 275-seat assembly, the largest bloc 

among the contestants. This plurality, however, was not sufficient for the 

Shi’a Alliance to form a government independently – instead a coalition 

government will be necessary, drawing from some or all of the other large 

blocs in the Council of Representatives (CoR), namely the Kurdish Alliance, 

the Sunni Arab parties, and the non-sectarian Iraqi List electoral coalitions. 

As an incentive to compromise, the constitution stipulates that the CoR 

must, by a two-thirds super majority, elect a three-person Presidency 

Council; which then names the nominee of the CoR bloc with the largest 

number to form a Cabinet. 

While Iraqi leaders from all the major parties declared their intent to 

establish an inclusive government, furthering understanding and trust 
18

between political groups with the objective of establishing a government of 

national unity remained a difficult challenge. Recent terrorist activity and a 

serious rise in sectarian violence impeded these efforts. Notwithstanding 

these setbacks, Iraqi government and religious leaders, in a demonstration of 

unity, unanimously condemned the bombing of the Golden Mosque in 

Samarra and the violence that followed, and called for an end to sectarian

strife. Against this highly polarized political landscape, Sunni leaders 

publicly voiced confidence in re-engaging with their Shi’a and Kurdish 

counterparts across party lines, continuing a trend of increased Sunni 

involvement in the political process. Shi’a and Kurdish leaders have 

consistently and publicly welcomed and encouraged this increased Sunni

involvement. The newly elected Council of Representatives (CoR) 

convened on March 16 for an initial protocol ceremony, and the parties 

continued working towards a unity government, engaging in intensive, daily 

negotiations, in which the U.S. Embassy has played a facilitating role. 

When assessing U.S. efforts to help the Iraqis facilitate a “sustainable 

political settlement,” it is necessary to look beyond the snapshot of the 

current situation. A proper analysis requires an examination of political and 

diplomatic efforts that have been ongoing for almost three years. Beginning 

with the November 15th Agreement in 2003 and the Transitional 

Administrative Law, through the recent elections and current political 

negotiations, U.S. policy has specifically been designed to expand avenues 

of participation and ensure a broad-based buy-in from all major communities 

in Iraq. For example, the fundamental reason that the possibility for a 

“sustainable political settlement” exists is because of the broad-based 

participation by Sunnis in the December election (resulting for the first time 

in a large bloc of Sunni parliamentarians from two separate lists). A diverse 

set of outreach efforts, either carried out or encouraged by the United States 

throughout 2004 and 2005, helped to advance the political process and led to 

meaningful engagement by the Sunnis in the political process and an 

acceptance of their role by Iraq’s other communities. 

In this regard, the decision to stay with the January 2005 election date 

despite a widespread Sunni boycott should be understood as a necessary 

condition of a momentum-building political strategy. Iraqis, with U.S. 

encouragement, decided that only by meeting benchmarks and moving the 

process forward would they be able to bring all Iraqi communities into the 

process. Similarly, the Iraqi decision to stick as close to possible to the 

constitutional deadline of August 15th was necessary to keep commitments 
19

made to Iraq’s other communities, and to encourage the Iraqi Islamic Party – 

Iraq’s largest Sunni party – to offer compromise and put forward negotiable 

demands. This policy, coupled with active and direct engagement from the 

highest levels of the United States Government, led to the amendment 

package agreed to on October 10, shortly before the constitutional 

referendum. The ability of the Iraqis to establish the institutions of a 

broadly-based political system shows that their commitment to go forward at 

each step in the political transition has been responsible for strengthening the 

prospects for a unity government. 

In sum, the opportunity for a true unity government with broad-based 

buy-in from at least four major electoral lists and all of Iraq’s communities is 

the direct result of these efforts by Iraqi leaders and the United States. This 

has been an ongoing process, and at every stage Iraqi leaders have had to 

bargain, negotiate, and compromise. The U.S. will continue to remain 

actively engaged, not only through the government formation process, but 

also throughout 2006 to help the new government build a sustainable and 

enduring national compact. Momentum building events over the next year 

include, but are not limited to, provincial elections, a constitutional 

amendment process, and implementing legislation for the constitution’s 

broad outlines in areas such as the judiciary and natural resource 

management. 

III. Any specific conditions included in the April 2005 Multi-National 

Forces-Iraq campaign action plan (referred to in United States 

Government Accountability Office October 2005 report on Rebuilding 

Iraq; DOD Reports Should Link Economic, Governance, and Security 

Indicators to Conditions for Stabilizing Iraq), and any subsequent 

updates to that campaign plan, that must be met in order to provide for 

the transition of additional security responsibility to Iraqi Security 

Forces. 

Since the publication of the October 2005 GAO report, the President 

published the National Strategy for Victory in Iraq (NSVI). The NSVI 

provides a broader and more developed set of indicators of progress in Iraq 

than indicators linked to the narrower issue of conditions in the MNF-I 

campaign action plan for transition of security responsibilities to Iraqi 

forces. 
20

Leaders of the Iraqi government, the U.S. government, and U.S. 

coalition partners in Iraq assess when conditions permit handing over 

security responsibility from Coalition forces to the ISF. These leaders 

include the U.S. Ambassador, the U.K. Ambassador, the Iraqi Ministers of 

Defense and Interior, the Iraqi National Security Advisor, Iraqi provincial 

governors, and the Commanding General and Deputy Commanding General 

of MNF-I. Transfers of responsibility are evaluated area-by-area and 

province-by-province. 

Recommendations for transfer include an assessment of achieving 

specific conditions (in categories similar to those in the MNF-I campaign 

action plan), such as: 

• levels of present and projected insurgent activity; 

• readiness and capabilities of ISF; 

• readiness and capabilities of relevant government institutions; and 

• ability of Coalition forces to reinforce the ISF should this become 

necessary. 

The recommendation to transfer security responsibilities is based on 

assessments according to the specific situation in any one area or region in 

the context of the overall security environment. An area does not 

necessarily need to meet all conditions in each category before transfer is 

recommended. Each and every transfer will ensure an effective and 

successful handover of security responsibilities. 

Campaign plans support the strategy, and revisions and 

implementation of theater campaign plans will be consistent with the NSVI. 

MNF-I and Embassy Baghdad are currently in the process of updating a 

joint campaign plan. 

IV. To the extent that these conditions are not covered under paragraph 

III, the following should also be addressed: 

(A) The number of battalions of the Iraqi Armed Forces that must 

be able to operate independently or to take the lead in 

counterinsurgency operations and the defense of Iraq’s territory; 

The Iraqi government, together with the Coalition, has identified a 

force structure to maintain a security environment in Iraq to provide a basis 
21

for transitioning Iraq to security self-reliance. The end-strength forces 

structure of the Iraqi Armed Forces is approximately 131,000 personnel, 

manning one Iraqi Ground Forces Command, 10 divisions and 36 brigade 

headquarters, 114 Army and special operations battalions, six Air Force 

squadrons, three Navy squadrons, and 18 combat support, combat service, 

and support battalions. As of March 20, 111,000 personnel or 85 percent of 

the authorized end strength has been trained and equipped. With the initial 

focus on establishing combat units, attention is now shifting toward the 

logistics backbone needed to facilitate independent operations. One 

hundred-two Iraqi Army and Special Operations battalions are now 

conducting counter-insurgency operations with 62 battalions “in the lead.” 

ISF have conducted more independent operations than MNF-I in three of the 

last five months. 

There is no specific threshold for the number of Iraqi Armed Forces 

battalions that must be judged capable of operating independently before the 

number of U.S. forces in Iraq can be reduced. Force levels will continue to 

adapt to the circumstances on the ground and key events, such as the January 

and December 2005 elections and the October 2005 constitutional 

referendum. The Secretary of Defense and the Chairman, Joint Chiefs of 

Staff continue to advise the President on the appropriate level of U.S. forces 

in Iraq and in the surrounding theater of operations, based on current 

conditions. These conditions include, but are not limited to, key elements of 

the MNF-I campaign action plan, such as the increasing leadership of Iraqi 

Security Forces in counterinsurgency operations and battle space ownership, 

and progress in the political process. The assessment of the current 

conditions is derived through consultations with U.S. military commanders 

in Iraq and takes into account assessments by Embassy Baghdad, the Iraqi 

government, and U.S. coalition partners. 

(B) The number of Iraqi special police units that must be able to 

operate independently or to take the lead in maintaining law and 

order and fighting the insurgency; 

The Ministry of Interior forces consist of the Iraqi Police Service 

(IPS), the Iraqi Highway Patrol, National Police (formerly the Special 

Police, comprising the Police Commandos, Public Order Police, and the 

Mechanized Police), the Emergency Response Unit, Department of Border 

Enforcement, and the Center for Dignitary Protection.
22

The end-strength force structure for all Ministry of Interior forces is 

195,000 trained and equipped personnel manning two division headquarters, 

nine brigade headquarters, twelve Public Order battalions, twelve 

Commando battalions, three mechanized battalions, and one Emergency 

Response Unit. The force structure plan is designed to enable a stable civilsecurity environment in which a prosperous economy and a democratic and 

representative government that respects and promotes human rights can 

evolve. As of March 20, 130,700 Ministry of Interior security personnel, or 

67 percent of the authorized end strength of 195,000, have been trained and 

equipped. This includes 89,000 IPS personnel, as described in the next 

section, and 41,700 other Ministry of Interior forces, such as 27 National 

Police Force battalions and one Emergency Response Unit conducting 

operations with ten of these units "in the lead." There is no specific 

threshold for the number of Iraqi special police units that must be judged 

capable of operating independently or in the lead before U.S. force levels 

can be reduced. 

The increased capability of Iraqi forces to lead operations was evident 

in their efforts to prevent violence from escalating after the February 22 

bombing of the Golden Mosque. Their performance was a positive 

indication of their increasing ability to maintain law and order. Following 

the bombing, the Iraqi National Police responded to an armed demonstration 

in an area immediately adjacent to Sadr City, where an angry crowd had 

surrounded the Sunni al-Quds mosque. The Iraqi brigade commander placed 

his troops, who were 65 percent Shi'a, between the crowd and the mosque, 

and talked to the crowd using a megaphone, calling for calm and urging 

them to disperse. The crowd eventually left without incident and the 

National Police remained in position overnight to guard the mosque until the 

threat was over. This demonstration of Iraqi leadership helped to defuse a 

potential confrontation between Sunni and Shi'a and prevented the escalation 

of violence in the area.

(C) The number of regular police that must be trained and 

equipped to maintain law and order; and 

The end-strength force structure of the IPS is 135,000 trained and 

equipped personnel. As of March 20, over 89,000 IPS, or 66 percent of the 

authorized end strength, have been trained and equipped, an increase of over 

14,000 since the December 15, 2005 parliamentary election. These IPS 
23

personnel work alongside the 41,700 other Ministry of Interior forces 

described in the previous section. 

The IPS is the primary civilian police organization in Iraq. Their 

mission is to enforce the law, safeguard the public, and provide internal 

security at the local level. The IPS is organized into patrol, station, and 

traffic sections in all major cities and provinces in Iraq and is responsible for 

providing security in more than 130 districts and at nearly 780 stations 

throughout Iraq. The scope of their responsibility demonstrates the critical 

need to ensure the development of professional, capable police forces that 

utilize modern policing techniques, follow the rule of law, and respect 

human rights. The Civilian Police Assistance Training Team (CPATT) 

works closely with the Ministry of Interior to improve the performance and 

professionalism of these forces. Police Transition Teams mentor and assist 

the IPS in a role similar to that of the Coalition Military Transition Teams, 

evaluating their progress and instituting the necessary procedures to continue 

development of a professional police force. 

There is no specific threshold for the number of IPS that must be 

trained and equipped to maintain law and order and thereby enable U.S. 

force levels to be reduced. 

(D) The ability of Iraq’s federal ministries and provincial and 

local governments to independently sustain, direct, and 

coordinate Iraq’s security forces. 

Self-reliant security forces require effective Ministries of Defense and 

Interior. In addition, Iraq’s local and provincial governments, along with the 

federal government in Baghdad, must also be able to direct and coordinate

Iraq’s local (police) security forces effectively free from the influence of 

militias that undermine legitimate authority and pose a threat to public 

security. This effective control by the Iraqi local, provincial, and federal 

governments is part of what differentiates the assumption of security 

responsibility in a given area by the Iraqis from the control of battle space in 

a given area by Iraqi units. 

The Ministries of Defense and Interior continued to experience 

challenges with critical institutional functions, including administrative 

processes, programming and budgeting, finance, and sustaining operations in 
24

addition to ensuring that the security ministries and their respective 

subordinate chains of command are not undermined by militia or criminal 

influences. The mission to build the ministerial capability required to 

manage and sustain the operating forces shifted on October 1, 2005, from 

the Department of State’s Iraq Reconstruction Management Office (IRMO) 

to the Multi-National Security Transition Command-Iraq (MNSTC-I). This 

realignment under the direction of MNSTC-I ensures that the development 

of pivotal ministerial functions is synchronized with the development of 

Iraqi Security Forces. 

Iraq's local and provincial governments face significant challenges, a 

number of which stem from a long-standing history of a consolidated, 

centralized power structure in Baghdad and limited local authority. These 

governments continue to develop, while also attempting to perform various 

functions and deliver services. One of these functions is directing and 

coordinating Iraq's local security forces, especially Iraq's police forces, in

conjunction with the national government as part of the overall system for 

maintaining civilian control over the ISF. The Coalition continues to 

increase the capacity of Iraq’s local and provincial governments, with PRTs 

as the most recent initiative to bolster local and provincial governance. 

V. The criteria to be used to evaluate progress toward meeting such 

conditions necessary to provide for the transition of additional security 

responsibilities to the Iraqi Security Forces. 

Political and economic criteria used to evaluate progress toward 

meeting these conditions include: the formation of an inclusive and 

representative national government; ministries free from sectarian and 

militia influence; fully functioning government institutions with transparent 

practices, general accountability, and operating under general principles of 

good governance and the rule of law with a commitment to economic 

reform. 

With respect to security, leaders of the Iraqi government, the United 

States government, and U.S. coalition partners in Iraq, assess when 

conditions permit handing over security responsibility of specific areas from

the MNF-I to the Iraqis. This leadership includes the Iraqi Ministers of 

Defense and Interior, the Iraqi National Security Advisor, Iraqi provincial 

governors, the U.S. Ambassador, the U.K. Ambassador, and the 

Commanding General and Deputy Commanding General of MNF-I. 
25

Transfers of responsibility are evaluated area-by-area and region-by-region 

and province-by-province. 

Recommendations for transfer include an assessment of achieving 

specific conditions in categories similar to those in the MNF-I campaign 

action plan. These categories include: levels of present and projected 

insurgent activity; readiness and capabilities of the ISF; readiness and 

capabilities of relevant government institutions; and the ability of Coalition 

forces to reinforce the ISF should this become necessary. 

The recommendation to transfer security responsibilities is based on 

assessments according to specific criteria in an area or region within the 

context of the overall security environment. An area does not necessarily 

need to meet all conditions in each category before transfer is recommended. 

Transfers will ensure an effective and successful handover of security 

responsibilities; the transition to the ISF and reduced presence of Coalition 

forces will be visible to the Iraqi people 

VI. A plan for meeting such conditions, an assessment of the extent to 

which such conditions have been met, information regarding variables 

that could alter that plan, and the reasons for any subsequent changes 

to that plan. 

The Secretary of Defense and the Chairman of the Joint Chiefs of 

Staff continue to advise the President on the appropriate level of U.S. forces 

in Iraq and the surrounding theater of operations, based on conditions on the 

ground. These conditions include, but are not limited to, key elements of the 

MNF-I campaign action plan, such as the increasing leadership of ISF in 

counterinsurgency operations and battle space ownership, and progress in 

the political process. The assessment of those current conditions is arrived 

at through consultations with U.S. military commanders in Iraq and takes 

into account assessments by Embassy Baghdad, the Iraqi government and 

U.S. coalition partners. 

Arbitrary deadlines or timetables for the withdrawal of Coalition 

forces would be irresponsible and deadly, as they would suggest to the 

enemy that they can simply persevere to win. Lack of a timetable does not 

imply the Coalition’s posture in Iraq is static, rather the Coalition 

continually adjusts its posture and approaches as conditions evolve and Iraqi 

capabilities grow. 
26

In addition to the above descriptions of the plan for meeting conditions, 

please reference National Strategy for Victory in Iraq at 

www.whitehouse.gov; and Report to Congress, “Measuring Stability and 

Security in Iraq,” February 17, 2006, at http://www.defenselink.mil/, pages 

55-56. 

For additional details on Iraqi Security Forces training, performance, and 

progress reference February 17, 2006, “Measuring Stability and Security in 

Iraq,” http://www.defenselink.mil/, pages 34-54. 

For more specific force generation and force requirement information, 

reference the classified annex to the Report to Congress, “Measuring 

Stability and Security in Iraq.” 

For additional information on reconstruction, assistance, and the delivery of 

essential services, please reference the 2207 Quarterly Report to Congress 

on The Iraq Relief and Reconstruction Fund (IRRF), 

http://www.state.gov/p/nea/rls/rpt/2207, or for general information on the 

status of political, economic, and security efforts, the Weekly Status Report, 

http://www.state.gov/p/nea/rls/rpt/iraqstatus/2006/c16536.htm.