December 10,2008:  Although violence is still down sharply (about 80 percent) from its peaks in 2006-7, there are still several  suicide bombing gangs operating. Last month, there were 340 Iraqis (and eight U.S. troops) killed by terrorist violence, compared to 317 in October. The perpetrators are being sought.

A more serious problem for Iraq is the falling price of oil. It nearly hit $150 a barrel last Summer, and is now headed below $40 because of the global recession. Oil revenue is the government's main source of income, which has been adjusted downward over the last few months, to match the falling price Iraq's oil can be sold for. Iraq has nearly thirty years of infrastructure to build, rebuild and repair. Saddam diverted nearly all such spending to military and personal uses after 1979, and his supporters used terror to halt most reconstruction until last year. To add to the country's problems, there's a serious drought, and pressure from international lending agencies to reduce civil service salaries, and impose similar efficiencies throughout the government, if Iraq wants access to the massive credit it needs to build major infrastructure projects.  But despite the economic problems, this is the first year since 2003 that people felt safe enough to travel for the Eid (similar to Christmas in terms of partying) holidays. The traffic jams are growing in their size and duration, but there simply aren't enough terrorists available to take advantage of such a target rich environment. Perhaps the best indicator of improvement can be seen in the real estate market, where prices have doubled in most neighborhoods over the last year. Despite the corruption and crime, the economy is booming.

Britain will start withdrawing its forces in three months, a process that will reduce British troops strength in southern Iraq from 4,000 to 400 by early 2009. By the end of next year, U.S. troops are to withdraw to bases outside the cities, and only be used for emergencies. The war is over, and it's now up to the Iraqis to determine if they can govern themselves effectively. It's been half a century since the Iraqi military overthrew the constitutional monarchy that had tried, for a quarter of a century, to resolve all Iraqis ethnic and religious differences. Since then, half a century of dictators and terrorists couldn't do it. Can a democracy? No one knows.

December 9, 2008: Ten Sunni Arab terrorism suspects were arrested in Baghdad and Fallujah by Iraqi security forces.  With the recent arrests of key terrorists in Baghdad, Fallujah and Basra, Iraqi and American counter-terror experts believe they will see a further decline in terrorist violence. There are still believed to be two or three major terror gangs out there, capable to carrying out several suicide bombing attacks a month. But the police are on to these outfits, something made possible by the crushing of major Sunni and Shia terror organizations in the last year. The terrorists can still kill, but they can no longer keep the police out of entire towns or neighborhoods. The cops can go where they want, and more Iraqis feel safe in providing tips to the police. U.S. military counter-terror databases are proving useful to the Iraqi police, because many of the terrorists they are pursuing are known to the Americans as some of the "usual suspects" that U.S. troops have arrested, or identified, over the last five years.

December 8, 2008: U.S. troops captured four members of Iran backed Shia terror group Kataib Hezbollah. The four were caught in Basra, the southern oil town that has long been a base for pro-Iran Shia terrorists. Kataib Hezbollah is believed responsible for some of the recent terrorist bombing directed at Iraqi security forces.

December 7, 2008: Kurdish PKK separatists, in an effort to get Turkish bombing and ground attacks to stop against bases in northern Iraq, declared a unilateral nine day truce for the Moslem holiday of Eid. The Turks are on a roll against the PKK and are not likely to reciprocate.