Halabja is a town in Iraqi Kurdistan shaded by mountains, behind which lies Iran. On March 16, Kurds converged there to hold their annual commemoration of the Iraqi chemical attack that killed thousands in 1988. Normally it is an occasion for visits by Kurdish and foreign dignitaries, speeches extolling Kurdish suffering and advocating independence, and even some festive activities. When I visited last year, a power hang glider entertained the crowds by buzzing low over the Halabja memorial.
This year, the event took a different turn. Townspeople had long accused the Kurdish leadership of exploiting the gas attack for political gain and withholding foreign assistance intended for the attack's survivors, many still suffering from debilitating illnesses. Instead of joining the commemoration, Halabjans demonstrated at the memorial, which houses a museum, an art exhibit, and a conference room. Guards of the Patriotic Union of Kurdistan (PUK), one of the two main Kurdish parties, panicked and opened fire. One demonstrator died, several others were injured. Enraged, the crowd stormed the monument erected to the memory of their loved ones and burned it to the ground.
Deeply embarrassed, the PUK quickly pointed a finger at Iran. The Iranians have long meddled in Kurdish politics, supporting Islamist groups to check the secular parties' power. The Islamists are particularly strong in Halabja, where they gave rise to violent offshoots, such as Ansar al-Islam. Informed observers promptly offered a plausible explanation for an Iranian hand in the March 16 fracas: The "spontaneous" demonstration was a warning from Tehran to PUK leader Jalal Talabani, Iraq's president, to stop opposing the Shiite coalition's candidate for prime minister, Ibrahim Jaafari. Whether true or not, many Kurds certainly saw the event as an Iranian message.
The Kurds do not want a Jaafari-led government. During his first term, they say, he hindered their quest to gradually incorporate oil-rich Kirkuk into the Kurdish region. But their challenge to Mr. Jaafari is seen by many Iraqis as part of a struggle over their country's future between two bigger players: the United States and Iran.
The Shiite coalition, the United Iraqi Alliance (UIA), was established in 2004 to parlay the Shiites' demographic majority into political dominance. Supported by Iran, the strategy proved spectacularly successful. The UIA convincingly won both the January and December 2005 elections. Since then, Iran and other stakeholders have sought to maintain the Shiites' unity in the face of growing instability and violence. In an internal poll in February, Jaafari defeated his main rival, Adel Abdel-Mahdi, by a single vote. Mr. Abdel-Mahdi is a senior official in the Supreme Council for the Islamic Revolution in Iraq (SCIRI), an Islamist party that has contributed heavily to the recent surge in sectarian violence.
Although SCIRI is generally considered an Iranian proxy, Tehran actually prefers Jaafari to head the next government, because Abdel-Mahdi, despite his affiliation, is a pragmatist with secular rather than Islamist credentials who enjoys strong support in Washington. The Bush administration, in turn, considers Jaafari incapable of containing the violence. Moreover, Jaafari is beholden to the radical Shiite cleric Moqtada al-Sadr, who has repeatedly called for US forces to leave.
Kurdish opposition to Jaafari has been the main obstacle to the formation of a national unity government. The Kurds allied themselves with an array of Sunni Arab and secular parties to pressure the UIA to withdraw Jaafari's candidacy in favor of Abdel-Mahdi or another secular candidate. Even should they fail in their bid, the recent compromise agreement to set up an advisory national security council may undermine Jaafari's power. The rationale behind the council's creation was to dilute the power of a UIA-led government.
Whatever government emerges from this tug of war, in other words, will be weak. This is a dangerous prospect in a country that balances on the brink of civil war. The irony is that neither Iran nor the US can afford to press their power struggle too far. Both support Iraq's territorial integrity, a principle threatened by spiraling conflict. If Tehran was indeed behind the Halabja demonstration that turned violent, it would be playing with fire by heightening tensions.
Washington likewise finds itself under pressure to withdraw from Iraq even as it sees Iranian influence spread. Attempts to contain the Shiite parties that won the elections could unleash popular anger against the occupation.
Iran's recent decision to begin discussion with the US concerning Iraq may well be chiefly informed by its wish to deflect pressure stemming from the nuclear crisis, but both countries also share an interest in finding ways to stabilize Iraq. Both sides have much to gain and even more to lose in the current standoff. There couldn't be a better time for both to sit down together and put their cards on the table in an all-out effort to save Iraq and, thereby, their own vital interests in the Gulf.
• Joost Hiltermann is Middle East project director of the International Crisis Group.