WASHINGTON/BAGHDAD (Reuters) - In November 2010, the United States faced a painful dilemma in Iraq. The man Washington had picked from near-obscurity four years earlier to be Iraq’s prime minister, Nuri al-Maliki, had narrowly lost an election but was, with help from Iran, maneuvering to stay in power.

U.S. President Barack Obama (L) and Iraq's Prime Minister Nuri al-Maliki arrive to lay a wreath at the Tomb of the Unknowns at Arlington National Cemetery in Arlington, Virginia, in this December 12, 2011 file photo. REUTERS/Jonathan Ernst/Files

The clock was ticking as a U.S. troop drawdown gathered pace. American diplomats and Iraqi politicians cast about for alternatives to lead Iraq. But Iraqis had elected a hung parliament and there were no candidates with clear-cut support. Fearing chaos, Washington settled again on Maliki.

In a tense meeting in Baghdad’s heavily fortified Green Zone, two U.S. diplomats sat down with Maliki, Kurdish chief Massoud Barzani, and Iyad Allawi, the politician whose bloc had won the most seats in the election and whose support was needed to finalize any deal. Earlier that day, U.S. President Barack Obama had phoned Allawi and pledged his support for a government that included all Iraq’s main sects.

In the meeting, tempers flared. Both Allawi and Maliki threatened to walk out, and Barzani at one point physically blocked Allawi from leaving the room, according to two people with first-hand knowledge of the meeting. The Americans encouraged them to set aside their differences. At last, the Iraqis agreed a final deal which was spelled out in a handwritten note.

The agreement finalized that day was the last real power-sharing accord Iraq had, and it failed almost immediately. Thanks to Maliki and his opponents’ intransigence, the deal was never implemented and the country’s sectarian divides widened. Maliki has governed more as a defender of the Shi’ites than as an inclusive national leader.

Now, as violent Sunni militants from the Islamic State of Iraq and the Levant (ISIL) cement their hold over western Iraq, declare a Caliphate, and threaten a new civil war, Washington has again demanded that Iraq’s leaders form an inclusive government encompassing the country’s minority Sunnis and Kurds.

But former officials and even some in the current Obama administration say that effort may also founder. Maliki had been expected to be named prime minister for a third term after his coalition won April elections, but as security deteriorates pressure is mounting even from within his Shi’ite power base for him to go. Even if he is pushed aside, Washington will likely struggle to exert much sway over the situation.

More than a dozen former and current diplomats say the relationship between Washington and Baghdad has been marred by repeated missteps by both Obama and his predecessor President George W. Bush. Washington, the diplomats say, has been unwilling or unable to influence Iraqi politicians and in particular the man they helped bring to power.

While Maliki lost the 2010 elections, he emerged stronger, said Emma Sky, a British Middle East scholar who was a political adviser to U.S. commander Gen. Raymond Odierno from 2007-2010. Maliki then “faced no consequences when he reneged on his commitments” to integrate Sunnis into the government, she said.

Ali Khedery, a long-serving adviser to multiple U.S. ambassadors in Baghdad, said he resigned after warning in an October 2010 memorandum that U.S. backing for Maliki’s premiership would lead to dictatorship, renewed civil war and Iranian hegemony in Iraq. Other U.S. and British officials who shared his view had left Baghdad by the fall of 2010, he said, but his memo reached top White House officials, who overruled him.

To be fair, Maliki took some early positive steps, including facilitating the U.S. surge and confronting Shi’ite militiamen in Basra, according to former U.S. ambassador to Baghdad Zalmay Khalilzad. But his rule has proved increasingly divisive.

Maliki’s office declined to comment for this story, citing the demands on his time from the war campaign and efforts to choose a new government. Maliki has long blamed his opponents for sabotaging him, and feels let down by Washington.

“There is a bitterness in Maliki’s tone when he talks ... about the American role, even what is going on in DC, with speeches in Congress and Obama’s speech,” longtime Maliki ally Sami Askari said about his mood in recent weeks. “He ... has no hope. He says we have to rely on ourselves.”

“POGROM”

To some officials, the painful arc of U.S.-Iraq relations speaks less about one man, Maliki, than it does about the limits of American military and political power to bring democracy or exert decisive influence in the Middle East.

After decades of rule by autocrats, often supported by Washington, the region remains riven with rivalries and distrust. Despite the Arab Spring, a generation of politicians like Maliki are skeptical that political compromise can ever be reached or fair elections held.

James Jeffrey, the U.S. ambassador in Baghdad from 2010-2012, said the American effort to remake Iraq was never realistic or sustained enough to succeed. The Bush administration failed to explain to the U.S. public the scope of the effort needed and the Obama administration frittered away the limited influence it had, he said.

“This all operates on the assumption that we have the skill, the patience, the national interest, and the support from the American people to keep an occupation force in a country and to do long-term nation building a la Japan and Germany in an area that is far less fertile,” Jeffrey said. “I challenge the underlying assumption that we could do this.”

Robert Ford, who twice served as a senior American diplomat in Baghdad, said Washington was often impatient for Iraqi politicians “to finish their tiresome and long political negotiations.” At the same time “you’ve got to give them time to work out compromises that are sustainable.”

Obama, elected in 2008 on a platform to end the war, has visited Iraq just once as president. Having blessed Maliki’s continuation in power, he completed Bush’s plan to withdraw U.S. troops and quickly refocused attention elsewhere, ending the frequent video conferences Bush held with Maliki and handing the Iraq portfolio to Vice President Joe Biden.

The White House declined repeated requests to discuss the U.S. relationship with Maliki.

Maliki, who has visited Washington twice in the last three years, has grown mistrustful of America’s inconstancy.

“I think he has a very hard time figuring us out, because we do a lot of things that don’t seem consistent to him. I think he finds us very frustrating, and very difficult to read,” said Ken Pollack, a former White House and CIA official, and long-time Iraq specialist.

Pollack, who met Maliki in March and later briefed U.S. officials on his trip, said the Iraqi leader appeared obsessed with marginalizing his political opponents after April’s national elections. He showed little interest in discussing reconciliation or economic development, Pollack said.

“We were trying as hard as we could to get him to talk about something other than a pogrom against his opponents,” said Pollack, now at the Brookings Institution think tank. “He just wouldn’t do it, no matter how much bait we gave him.”

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“VERY AMBITIOUS”

Maliki is no American creation. He spent years in exile as a member of a secretive Shi’ite dissident group known as the Dawa, eluding assassins from Iraqi dictator Saddam Hussein’s Sunni-led Baath Party. But Washington did have a hand in the stern-faced 64-year-old premier’s final ascent.

In 2006, as a Sunni insurgency raged, Iraq’s then-Prime Minister Ibrahim al Jaafari, a Shi’ite, found himself untrusted by Shi’ite, Kurd and Sunni leaders alike, as well as by Washington.

Eager to bolster the U.S. public’s belief in the war and Iraq’s future, Bush officials turned to Maliki as a compromise candidate. Secretary of State Condoleezza Rice arrived in Baghdad on a surprise visit and met Maliki and other Iraqi leaders.

At the residence of U.S. ambassador Khalilzad, Maliki told American officials that his first goal would be to ease the mistrust between Iraq’s religious groups.

“He was regarded as an Arab nationalist,” Khalilzad told reporters recently. “He was clean with maybe the potential to be a strong leader.”

But Ford, the former diplomat, said the Americans misjudged Maliki.

“When we supported Maliki in 2006 to become the new prime minister we didn’t realize how capable a politician he could be,” Ford said, “and we didn’t realize how strong a survivor he could be.”

Over time, it became increasingly clear that Maliki viewed the world in stark terms shaped by his own fight against Baathists, whom he compared to the Nazi party in Germany. At the same time, he gradually amassed power in the prime minister’s office.

Maliki set up operational commands that circumvented the regular military hierarchy, which the United States had insisted include Sunnis and Kurds. In his second term, he took the posts of defense and interior minister for himself and named loyalists to senior military positions as the United States was trying to strengthen Iraq’s army.

“Over the years, we didn’t strongly react to these moves,” Ford said, “as various key elements of the Iraqi body politic grew ever more alienated from Maliki and his team.”

By 2009, Maliki had set up an elite army unit which reported directly to his military office and had been accused of abuses. One of the most notorious cases came in 2010 when human rights inspectors discovered that at least 400 Sunni men had been picked up from Mosul in military sweeps and then held without charges and allegedly tortured in an undeclared facility at a Baghdad military airport base. Maliki said he did not know about the detainees until rights inspectors informed him. He blamed the detentions and abusive conditions on Baathists who had infiltrated his security forces.

Christopher Hill, who served as the American ambassador in Iraq in 2009 and 2010, said the United States did try to push Maliki to end his sectarian rule, but failed. The 2007 “surge” and Sunni Arab uprising against al Qaeda-allied militants weakened the insurgency but did nothing to resolve Iraq’s sectarian divisions, Hill said. “Nothing was squared away in 2007.”

He recalled how Maliki resisted paying Sunni tribal fighters whose support was crucial to end the worst of the sectarian killing unleashed in 2003.

“I had to go to him, sometimes on a weekly basis, just to make sure the check was indeed in the mail,” Hill said. “Just looking at his body language, he didn’t believe in the whole venture.”

“PREDICTABLE”

Many U.S. and British officials directly involved in the events cite March 2010 as the moment when Iraq began to become unglued again, and U.S. relations with Maliki became more troublesome.

By then, Iraq’s sectarian war had eased, and the parliamentary polls that month were both relatively peaceful and fair. Maliki’s State of Law coalition came in a very close second behind a largely Sunni slate led by Allawi, a secular Shi’ite who had acted as interim prime minister.

Maliki leaned on Iraq’s Supreme Court to produce a ruling that allowed him, not Allawi, to try to form a government, according to these officials. Allawi’s bloc had won 91 seats compared to Maliki’s 89, and the ruling appeared to violate Iraq’s constitution, which U.S. experts had helped to draft.

Sky, the former adviser, said U.S. national security aides differed on how to respond. Some argued that Washington should back Allawi’s right to form a government, strengthening Iraq’s political system.

“I think if the U.S. had agreed on this approach, it might have led to an agreement among the elites on real power sharing,” Sky, now at Yale University, said in an e-mail.

Hill, U.S. ambassador at the time, said the lingering sectarian divide made it impossible for Allawi to become prime minister. After the election, Shi’ite religious parties that made up a majority in parliament refused to support him.

“It wasn’t going to happen,” said Hill. “There is absolutely no way we could have affected that short of a 1950s style, Latin American coup.”

Allawi could not be reached for comment for this story. And some Western diplomats and military officials criticized the Obama administration for choosing Hill, who had little Middle East experience, as their envoy.

Jeffrey, who took over from Hill as ambassador in August 2010, said that as the process of choosing a prime minister dragged on U.S. diplomats used every bit of influence they had to try to broker a deal, even as they looked out for an alternative to Maliki.

“There was a lot of opposition to him, particularly among the American military, so I was willing to try to delay this thing and see if we could find alternatives,” Jeffrey said. “We never found one.”

It took almost 10 months, until late December 2010, to finalize a government. U.S. officials worried the continued political vacuum could unleash chaos right in the middle of the U.S. troop withdrawal.

Eventually, Sky said, Washington and Iran made it clear Maliki was their choice.

Khedery, the adviser to U.S. ambassadors, said Shi’ite Iran and the chief of Tehran’s covert Qods Force, Gen. Qassem Suleimani, played a central role in cementing other Shi’ite leaders’ backing for Maliki. Iran pressured a key Shi’ite group loyal to firebrand cleric Moqtada al-Sadr, who had feuded with Maliki, to support him.

A year later, the last U.S. combat troops left Iraq, taking with them much of Washington’s remaining clout in the country and leaving behind a flawed leader.

“Not only was this predictable, but it was predicted - it was preventable,” Khedery said of Iraq’s current catastrophe.

NAMING AND SHAMING?

On December 15th, 2011, then-U.S. Defense Secretary Leon Panetta watched as U.S. soldiers at Baghdad’s heavily fortified airport lowered the flag of American forces in Iraq, marking the end of Washington’s Iraq adventure.

“Challenges remain, but the United States will be there to stand by the Iraqi people,” Panetta said at a modest ceremony notable for the absence of Iraq’s most senior politicians, who portrayed the withdrawal as a victory for Iraqi sovereignty.

How closely the Obama administration stood by after 2011 to prevent the worsening of Iraq’s sectarian divisions is open to debate.

Even as Panetta spoke, government forces had surrounded the home of Vice President Tareq al-Hashemi, Iraq’s highest-ranking Sunni official, suspected by Maliki and other officials of ties to killings and bombings, links he has always denied.

Four days later, Iraq’s Interior Ministry issued an arrest warrant for Hashemi. He fled Baghdad for Iraqi Kurdistan and was later sentenced to death in absentia.

The U.S. response was muted, partly because Obama administration officials believed allegations against Hashemi’s entourage had merit and because not many Sunnis rushed to defend Hashemi, the officials said.

U.S. officials were more troubled by Maliki’s move a year later against another of the country’s top-ranking Sunnis, popular Finance Minister Rafie al-Essawi, for alleged ties to militants. In December 2012, government forces detained a number of Essawi’s bodyguards, provoking protests in Anbar, Essawi’s home province. Essawi resigned in March 2013.

“Essawi was a different story. There was a lot of concern about that. We made our concern well known,” a U.S. official said on condition of anonymity. But the incident barely registered publicly in Washington, where the White House was focused on the worsening conflict in Syria.

The U.S. embassy saw Essawi, a former surgeon, as a moderate Sunni with whom they could do business. Sky said U.S. intelligence officials looked into accusations against Essawi and judged him innocent.

In the Essawi case and others, U.S. diplomats sought to stop Maliki and other politicians inflaming sectarian tensions, the official said.

“We’ve prevented them from doing some things, but some things (we) haven’t been able to,” he said. “And I think that’s kind of what’s led us to where we are today.”

Critics say the Obama administration was not bold enough.

“We should have been standing up and naming and shaming,” Pollack said. “The White House said nothing, or talked out of both sides of its mouth, and came up with all these excuses to do nothing, because in truth they didn’t want to do it.”

Today, as Obama seeks to push Iraqi political leaders together to repel ISIL, he will have to overcome skepticism from Iraqis who believe the United States has continued to back Maliki even as he sidelined Sunnis and Kurds. The Kurds, whose leader Barzani supported Maliki in 2010, feel particularly aggrieved. They now accuse Maliki of walking away from the terms of the deal.

With Iraq facing possible disintegration, former U.S. ambassador Jeffrey said the fundamental problem was born during American occupation: Democracy empowered a Shi’ite majority that fears its former Sunni rulers.

“We’re all about democracy, that’s what we were doing there, and democracy produced this result.”