In June 2004, under the auspices of United Nations Security Council Resolution 1546 the Coalition transferred limited sovereignty to a caretaker government, whose first act was to begin the trial of Saddam Hussein. The government began the process of moving towards elections, though the insurgency, and the lack of cohesion within the government itself, led to repeated delays.
Militia leader Muqtada al-Sadr used his grass-roots organization and Mahdi Militia of over a thousand armed men to take control of the streets of Baghdad. The CPA soon realized it had lost control and closed down his popular newspaper. This resulted in mass anti-American demonstrations. The CPA then attempted to arrest al-Sadr on murder charges. He defied the American military by taking refuge in the Holy City of Najaf.
Through the months of July and August, a series of skirmishes in and around Najaf culminated with the Imman Ali Mosque itself under siege, only to have a peace deal brokered by al-Sistani in late August. Al-Sadr then declared a national cease fire, and opened negotiations with the American and government forces. His militia was incorporated into the Iraqi security forces and al-Sadr is now a special envoy. This incident was the turning point in the failed American efforts to install Ahmed Chalabi as leader of the interim government. The CPA then put Iyad Allawi in power; ultimately he was only marginally more popular than Chalabi.
The Allawi government, with significant numbers of holdovers from the Coalition Provisional Authority, began to engage in attempts to secure control of the oil infrastructure, the source of Iraq's foreign currency, and control of the major cities of Iraq. The continuing insurgencies, poor state of the Iraqi Army, disorganized condition of police and security forces, as well as the lack of revenue hampered their efforts to assert control. In addition, both former Ba'athist elements and militant Shia groups engaged in sabotage, terrorism, open rebellion, and establishing their own security zones in all or part of a dozen cities. The Allawi government vowed to crush resistance, using U.S. troops, but at the same time negotiated with Muqtada al-Sadr.
Offensives and counteroffensives
Beginning 8 November, American and Iraqi forces invaded the militant stronghold of Fallujah in Operation Phantom Fury, killing and capturing many insurgents. Many rebels were thought to have fled the city before the invasion. U.S.-backed figures put insurgency losses at over 2,000. It was the bloodiest single battle for the U.S. in the war, with 92 Americans dead and several hundred wounded. A video showing the killing of at least one unarmed and wounded man by an American serviceman surfaced, throwing renewed doubt and outrage at the efficiency of the U.S. occupation. The Marine was later cleared of any wrongdoing because the Marines had been warned that the enemy would sometimes feign death and booby-trap bodies as a tactic to lure Marines to their deaths. November was the deadliest month of the occupation for coalition troops, surpassing April.
Another offensive was launched by insurgents during the month of November in Mosul. U.S. forces backed by peshmerga fighters launched a counteroffensive which resulted in the Battle of Mosul (2004). The fighting in Mosul occurred concurrently with the fighting in Fallujah and attributed to the high number of American casualties taken that month.
In December, 14 American soldiers were killed and over a hundred injured when an explosion struck an open-tent mess hall in Mosul, where President Bush had spent Thanksgiving with troops the year before. The explosion is believed to have come from a suicide bomber.
After a review of the military strategy in the end of 2004, then commanding general of the MNF-I, General George W. Casey, Jr. directed the Coalition forces to shift their focus from fighting insurgents to training Iraqis. At the time, the Iraqi insurgency was mainly directed against the occupation and it was believed that if the Coalition would reduce its presence then the insurgency would diminish. Military planners hoped that national elections would change the perception of being under occupation, stabilize the situation and allow the Coalition to reduce its presence.
Iraqi elections and aftermath
Voters in the 2005 Iraqi legislative election
Main article: Iraqi legislative election, January 2005
On 30 January, an election for a government to draft a permanent constitution took place. Although some violence and lack of widespread Sunni Arab participation marred the event, most of the eligible Kurd and Shia populace participated. On 4 February, Paul Wolfowitz announced that 15,000 U.S. troops whose tours of duty had been extended in order to provide election security would be pulled out of Iraq by the next month. February, March and April proved to be relatively peaceful months compared to the carnage of November and January, with insurgent attacks averaging 30 a day from the average 70.
Hopes for a quick end to an insurgency and a withdrawal of U.S. troops were dashed at the advent of May, Iraq's bloodiest month since the invasion of U.S. forces in March and April 2003. Suicide bombers, believed to be mainly disheartened Iraqi Sunni Arabs, Syrians and Saudis, tore through Iraq. Their targets were often Shia gatherings or civilian concentrations mainly of Shias. As a result, over 700 Iraqi civilians died in that month, as well as 79 U.S. soldiers.
A large weapons cache in New Ubaydi is destroyed
During early and mid-May, the U.S. also launched Operation Matador, an assault by around 1,000 Marines in the ungoverned region of western Iraq. Its goal was the closing of suspected insurgent supply routes of volunteers and material from Syria, and with the fight they received their assumption proved correct. Fighters armed with flak jackets (unseen in the insurgency by this time) and sporting sophisticated tactics met the Marines, eventually inflicting 30 U.S. casualties by the operation's end, and suffering 125 casualties themselves.
The Marines succeeded, recapturing the whole region and even fighting insurgents all the way to the Syrian border, where they were forced to stop (Syrian residents living near the border heard the American bombs very clearly during the operation). The vast majority of these armed and trained insurgents quickly dispersed before the U.S. could bring the full force of its firepower on them, as it did in Fallujah.
Announcements and renewed fighting
On 14 August 2005 the Washington Post quoted one anonymous U.S. senior official expressing that "the United States no longer expects to see a model new democracy, a self-supporting oil industry or a society in which the majority of people are free from serious security or economic challenges... 'What we expected to achieve was never realistic given the timetable or what unfolded on the ground'".
On 22 September 2005, Prince Saud al-Faisal, the Saudi foreign minister, said he had warned the Bush administration that Iraq was hurtling toward disintegration, and that the election planned for December was unlikely to make any difference. U.S. officials immediately made statements rejecting this view.
Constitutional ratification and elections
The National Assembly elected in January had drafted a new constitution to be ratified in a national referendum on 15 October 2005. For ratification, the constitution required a majority of national vote, and could be blocked by a two thirds "no" vote in each of at least three of the 18 governorates. In the actual vote, 79% of the voters voted in favor, and there was a two thirds "no" vote in only two governorates, both predominantly Sunni. The new Constitution of Iraq was ratified and took effect. Sunni turnout was substantially heavier than for the January elections, but insufficient to block ratification.
Elections for a new Iraqi National Assembly were held under the new constitution on 15 December 2005. This election used a proportional system, with approximately 25% of the seats required to be filled by women. After the election, a coalition government was formed under the leadership of Prime Minister Nouri al-Maliki, with Jalal Talabani as president.