Breaking the deadlock over forming Iraq's interim government came down, in the end, to a simple compromise: Kurds dropped their immediate demand that the oil-rich city of Kirkuk be added to their autonomous section of Iraq, and Shiite Arabs said they wouldn't insist on dismantling the Kurds' peshmerga militia.

The country's two main political powers have essentially deferred these and other difficult issues until a time when Iraq's politics may be calmer and the two sides may be closer. It's a position that many observers expected to have been reached within weeks of the election.

But this was a compromise between radically different factions in a country where threats and the gun have long stood in for dialogue.

That an agreement was achieved is a sign of hope that Iraq's political learning curve is accelerating. That it took so long, analysts say, is a sign of the fault lines along which the transition could break down. The two months it took to form a government, analysts say, means a new constitution is unlikely to be written and ratified by an Aug. 15 deadline.

"There's still a lot of work to do, but perhaps they're getting the experience they would have lacked earlier," says Nathan Brown, a senior analyst at the Carnegie Endowment for International Peace in Washington, D.C. "The problem is that their deadline is now extremely tight, and a lot of the key compromises were over positions and personalities. It's not clear that they've come to understandings on principles."

Iraqi politicians must now turn toward issues over which there is little consensus, even as an insurgency led by Sunni Arab fighters, who largely boycotted the elections, rages. In the short term, the risk is a failure to govern while focusing on big constitutional issues; in the long term, there could be a breakdown between Iraq's Kurds and Arabs.

The Kurds, who have been at war with the central state for most of Iraq's 85-year history, still want the new constitution to grant them Kirkuk. Iraq's Arab majority, both Shiite and Sunni, remains determined not to give it to them. The Kurds also want the autonomy of their army guaranteed, something most other Iraqis see as destabilizing.

A gulf also exists between Shiite leaders who want a strong Islamic flavor to the new constitution, and the Kurds, who favor a more secular model.

"If you look at the constitutional issues, it almost starts looking like Arab-Israel negotiations, where the so-called final-status issues were going to be left on the table till the end because they were so thorny,'' says Charles Tripp, a leading historian of Iraq at London's School of Oriental and African Studies. "But in Iraq, they have to deal with their version of final-status issues right at the beginning."

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