(Reuters) - A 17-month U.S. effort to retrain and reunify Iraq’s regular army has failed to create a large number of effective Iraqi combat units or limit the power of sectarian militias, according to current and former U.S. military and civilian officials.

A member of the Iraqi security forces fires artillery during clashes with Islamic State militants near Falluja, Iraq, May 29, 2016. REUTERS/Alaa Al-Marjani

Concern about the shortcomings of the American attempt to strengthen the Iraqi military comes as Iraqi government forces and Shi’ite militias have launched an offensive to retake the city of Falluja from Islamic State. Aid groups fear the campaign could spark a humanitarian catastrophe, as an estimated 50,000 Sunni civilians remain trapped in the besieged town.

The continued weakness of regular Iraqi army units and reliance on Shi’ite militias, current and former U.S. military officials said, could impede Prime Minister Haider al-Abadi’s broader effort to defeat Islamic State and win the long-term support of Iraqi Sunnis. The sectarian divide between the majority Shi’ite and minority Sunni communities threatens to split the country for good.

Critics agree that there have been some military successes, citing the continued victories of American-trained Iraqi Special Forces, who have been fighting Islamic State for two years. But the presence of 4,000 American troops has failed to change the underlying Iraqi political dynamics that fuel the rise and growing power of sectarian militias.

Retired U.S. Lieutenant General Mick Bednarek, who commanded the U.S. military training effort in Iraq from 2013 to 2015, said the Iraqi army has not improved dramatically in the past eight months. He blamed a variety of problems, from a lack of Iraqis wanting to join the military to the resistance of some lower-level Iraqi officers to sending units to American training.

“The Iraqi military’s capacity hasn’t improved that much - part of that is the continuing challenge of recruitment and retention,” said Bednarek. “Our (officers) train who shows up, and the issue is we are not sure who is going to show up.”

Two senior U.S. military officers and Bednarek said that with few exceptions, the most effective and only truly non-sectarian Iraqi government fighting force is the Iraqi Special Forces, sometimes called the Counter-Terrorism Service. American officials expressed worry that the Special Forces units may burn out after nearly two years of continuous combat.

MILITIA INFLUENCE

Across Iraq, regular Iraqi army units have largely watched from the sidelines as Iraqi Special Forces and Shi’ite militias have reclaimed land from Islamic State, current and former U.S. military officials said. Militias have repeatedly taken advantage of the power vacuums that have emerged after Islamic State defeats.

The Iraqi military operations command of Salahuddin province, north of Baghdad, is dominated by a Shi’ite militia leader, Abu Mehdi Mohandis, according to a current U.S. military officer, an Iraqi security official and three Iraqi officials who monitor the province.

Mohandis serves as the chief state administrator for Shi’ite paramilitary forces. The U.S. Treasury sanctioned him in 2009 for allegedly attacking U.S. forces in Iraq. He was also convicted in absentia by Kuwaiti courts for the 1983 bombings of the U.S. and French embassies in Kuwait.

The Fifth Iraqi Army Division in eastern Diyala province is considered to be under the command of the Badr group, a powerful Shi’ite militia and political party with strong ties to Iran’s Islamic Revolutionary Guards Corps, according to four current and former U.S. military officers.

In Baghdad, U.S. military officers estimate that 10 percent to 20 percent of the 300 officers who run the Iraqi military’s Operations Command have an affinity or association with either the Badr militia or the Shi’ite religious leader Muqtada al Sadr.

And after Iraqi Special Forces, aided by U.S. air strikes, captured a strategic oil refinery in the town of Baiji in October, Shi’ite militias looted all of its salvageable equipment, according to a senior U.S. military official and three Iraqi government officials.

Over the past year, U.S. military officers have struggled to ensure that militias do not seize American weaponry delivered to the main Iraqi army supply depot in Taji and to a brigade in the Saqlawiya region.

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“We would transfer arms to units in those areas - and either because of corrupt commanders or outright robbery - they would end up in the hands of the militia groups,” said one U.S. officer. The officer noted, however, that controls have been tightened and the number of cases was small. “You can’t eliminate it entirely. It’s just not realistic.”

“AN OFFICIAL BODY”

Iraqi government and senior paramilitary leaders said the reports of poor training and Shi’ite militia dominance in the military are false. They said the militias follow the orders of the prime minister and his military commanders.

Iraqi defense ministry spokesman Brigadier General Yahya Rasool called the militias “an official body connected with the office of the commander-in-chief of the armed forces.” He said they take their orders only from government officials and “have a great role in supporting the army forces and the federal police.”

Mohammed Bayati, a former human rights minister and senior Badr group leader, now commands forces in northern Salahuddin Province. He said the Shi’ite paramilitaries fall under the army, police and regular military chain-of-command. Bayati told Reuters that any reports of militias operating on their own were false.

“Yesterday, I was in the Salahuddin Operations Command,” he said. “All orders are coming from the police and army leadership.” The Shi’ite militias “are supporting the army and police.”

The spokesman for the government umbrella body that oversees the militias, Ahmed Al-Asadi, said the Shi’ite forces did not loot the Baiji refinery. “I deny totally such allegations,” he said. Islamic State, he said, stole and destroyed equipment.

The office of Prime Minister Abadi and the Iraqi Embassy in Washington didn’t respond to requests for comment.

AMERICAN CONCERNS

But current and former U.S. military officials and local Sunni leaders say the militias continue to take advantage of the vacuums that emerge in predominantly Sunni areas after Islamic State forces are defeated. A lack of strong regular army units allows the militias to remain the dominant players.

Norman Ricklefs, a former U.S. government adviser to the Iraqi interior and defense ministries, said the state has still not filled the void in most areas retaken from ISIS. He said militias are the most powerful they have been since Iraqi government forces defeated them in a series of battles across Iraq in 2008. Ricklefs regularly visits Iraq and maintains ties with the Iraqi security apparatus and Shi’ite and Sunni politicians.

“In the cities the militias occupy - Samarra and Tikrit and significant parts of eastern Baghdad - they are the most powerful force,” Ricklefs said. “For the first time since 2008, the government has lost control of large parts of cities” to Shi’ite militias.

One senior U.S military official said the setbacks call into question the Obama administration’s overall strategy in Iraq. He said any military training effort would fail until the U.S. put more pressure on Iraq’s Shi’ite and Sunni political leaders to strike a genuine power-sharing agreement.

“We need to accelerate the reconciliation piece to make Sunnis feel they are part of the government,” said the official, who asked not to be named. “Are we really in any way focused on that?”

Obama administration officials said the U.S. strategy is succeeding and Iraqi forces have steadily grown stronger with American support.

U.S. advisers have helped train existing units and set up two new Iraqi divisions, according to American and Iraqi officials. They achieved this despite struggling with shortfalls in Iraqi funding to hire new soldiers and a shortage of Iraqi Shi’ite volunteers.

But there has been little improvement in overall Iraqi army combat readiness, according to a U.S. civilian official, one ex-official, a former general and three current senior U.S. military officers.

Last October, American military officials estimated that only five Iraqi army divisions were ready for battle and put their combat readiness at only 60 to 65 percent. Today, those figures have increased only marginally, the officials said.

‘LION’S SHARE’ OF PROGRESS

The U.S. military spokesman in Iraq, Colonel Chris Garver, said that despite the difficulties, U.S. forces have seen Iraqi army units improve after training. He also cited advances by army brigades in areas around Falluja as signs of success.

But Garver acknowledged that the lion’s share of military offensives has been spearheaded by the Special Forces, and that two years of battle are taking a toll on Iraq’s elite soldiers.

“The Government of Iraq has relied heavily on the Iraqi special operations forces and the potential for these forces being depleted into combat ineffectiveness is a real concern,” he said.

Garver said the regular Iraqi army continues to struggle with increasing its ranks. “Recruiting and funding have both been well-documented challenges for the GOI,” or Government of Iraq. “These are areas the GOI must address.”

Brigadier Rasool, the Iraqi Defense Ministry spokesman, rejected any suggestion that the regular Iraqi army was not an equal partner to the Iraqi Special Forces.

“We have troops who were able to retake land from Daesh,” Rasool said, using an Arabic acronym for Islamic State. “After the fall of Mosul, the Ministry of Defense’s joint command has resupplied and retrained the Iraqi security forces.”

The current and former U.S. officials contended that the Falluja offensive is again exposing the weakness of regular army units.

“The regular army does not seem to have been rebuilt,” Ricklefs said, “and it’s a real pity.”