The current situation of US forces in Iraq is a thorny one by any account. US forces cannot stay because of the fierce resistance and the extensive loss of life and morale, and they cannot leave because of the unbearable loss of face a speedy pullout may entail. A sudden withdrawal from Iraq would spell an end not only to US schemes in Iraq, but for US imperial ambitions. The Iraqi debacle is throwing US policy off balance. The US quest for democratisation seems surrealistic now, so does its confrontation with Iran. The US needs friends in the region. It needs them to help it emerge from the Iraqi quagmire, but there is a price to pay, and that price may involve abandoning democratic reforms in Arab countries. The US administration is in a place where it has to choose between getting help in Iraq and maintaining pressure for reform on friendly regimes. The US is threatening to use military force against Iran, and yet it cannot do that. One reason is that it has 135,000 troops in Iraq, close to the Iranian border and vulnerable as a result. The US presence in Iraq has become a liability. As things stand, the US administration has to choose between keeping its troops in Iraq and waging war on Iran. These are tough choices, especially at present. The US has already made unsavoury concessions in Iraq. It has withdrawn some of the support it used to give to the Shias and Kurds in order to get the Sunnis involved in the political process. The US seems to have little political legroom left. A group of US senators recently suggested a scenario for exiting Iraq. Iraq, they said, should be divided into three parts, each with extensive autonomy, with less power given to the central government in Baghdad. The suggestion, published in The New York Times, shows how desperate things have become. The US administration knows that Iraqi Sunnis, and all Arab countries, reject the call for federalism in Iraq. Federalism used to be a key point in the Iraqi constitution, written under the auspices of US Ambassador Zalmay Khalilzad. But federalism would alienate the Sunnis and undermine suggested talks with representatives of the resistance. A few weeks ago, US Secretary of State Condoleezza Rice and British (now former) Foreign Secretary Jack Straw visited Iraq and tried to get the Shias and Kurds to offer concessions to the Sunnis. The Americans went as far as to ask the Iranians to help out in Iraq, but nothing came of it. Tehran wouldn't ask its Shia and Kurdish allies to make the kind of concessions the Americans wanted. Later on, the US accused Iran of blocking "democratisation" in Iraq. The real truth is that democratisation in Iraq is being held hostage to American prestige and imperial standing; that it can only occur when the Americans leave, and that they can only leave if a moment arrives -- presuming it ever will -- when leaving doesn't also mean having lost.