The transfer of power from the U.S. coalition authority to the Iraqis took place in a secret ceremony that the Iraqi people didn’t learn about until the next day. The violence has continued–among other incidents, a car bomb explosion and a rocket attack on a hotel used by foreigners paralyzed Baghdad today and deadly attacks hit the northern cities of Mosul and Fallujah yesterday–but, so far at least, it hasn’t reached unexpected levels. Still, when governing can only happen in a bubble, nothing has really changed. The security situation remains perilous.

The new Iraqi government is dependent on American troops to provide security, police the country and equip and train a new Iraqi army and police force. The U.S. military is so overstretched that the Pentagon this week announced it was calling up retirees from the Ready Reserve, a rarely-tapped pool of soldiers, to send to Iraq. The unsettling order came amidst otherwise positive news from Iraq. “The cloud in the silver lining,” a Senate Republican aide quipped.

If the Iraqi elections scheduled for January 2005 are put off for reasons of security, the interim government will be seen as a U.S. puppet regime. That may be its fate in any case, but Geoffrey Kemp, a senior analyst with the Nixon Center in Washington, says of the new leaders: “These are good guys. They’re putting their lives on the line every day. We can take comfort that in this prime minister we have a tough, articulate chap who has the backing of the CIA. For now, he’s as good as it gets.”

Iraqi Prime Minister Ayad Allawi is a former Baath Party member who turned against Saddam Hussein and has longstanding ties to the CIA. He is a potential dictator–a Saddam Lite, if you will. “But he’s ours,” says Kemp. The Iraqi people want security restored far more than they care about western fruits of democracy like civil liberties. A Democratic aide on the Senate Foreign Relations committee says talk of whether Allawi could become independent of his U.S. benefactors is like asking whether a puppet can become a real boy. “If he breaks the strings, he collapses,” says the aide.

The unintended consequences of the Iraq war are being felt around the globe. Since the Iraq operation was handled so poorly, it precludes other interventions, which is mostly a good thing–except in Sudan’s Darfur region, where a massive human calamity is unfolding. Hundreds of thousands of Africans are displaced and starving while an Arab Muslim tribe sanctioned by the government of Sudan marauds through villages on horseback, killing the men and raping the women. Secretary of State Colin Powell visited Darfur this week and said all the right things about the need for assistance. But instead of taking action, the administration continues to debate whether the systematic slaughter meets the legal definition of genocide.

The neo-conservatives who provided the intellectual framework for the Iraq invasion thought they could remake the map of the Middle East with democracies. They loved it when Bush linked Iraq, Iran and North Korea in an “Axis of Evil.” The neo-cons used to say, “Men go to Baghdad; real men go to Damascus and Tehran.” Now, after the Iraq experience, it’s clear Bush isn’t going to invade Syria. In Iran, the administration has embraced the United Nations and NATO, and is looking to the Europeans to provide leadership. The Bush doctrine of preemptive warfare is moribund, if not dead. “The neo-cons are out and the neo-realists are in,” says Geoff Kemp.

Invading Iraq was supposed to intimidate the mullahs in Iran to curb their nuclear ambition. Instead, the Iranian nuclear program is much further along than we realized, and the mullahs are in a strong position, having just rigged their own election. “They’re cheating and lying at every step,” says Kemp. “But we don’t even have enough men to fight the war we’re in, much less take on another one.” The former president of Iran says America is “a wounded beast.” The Iranians will be careful of the wounded beast; they won’t do anything to provoke it right now. But Iran is on its way to become the regional power in the Middle East.

That’s the outcome that Bush One feared, which is why he left Saddam in power. Without a strongman, Iraq could break up into three weak and warring ethnic states. This is not an apologia for Saddam. But it’s a cold dose of reality. By attacking the weakest link in the “Axis of Evil,” Bush emboldened Iran and North Korea, regimes far more dangerous to U.S. interests than Iraq. “This is a week of good news for Bush, and that’s it,” says Kemp.