Three years after U.S. troops pulled out, declaring the mission of restoring peace more or less complete, Iraq is no longer a post-conflict nation dealing with residual violence. It is now, once again, a full-blown sectarian war zone, with armed factions that hold territory and kill civilians at will

By Suadad al-Salhy

BAGHDAD, July 30 (Reuters) - The prison guards were counting inmates after the evening meal at Abu Ghraib jail when suddenly the lights went out. By the time they realised what was going on, the biggest combat operation by Iraqi insurgents in five years was under way.

Prisoners set clothes on fire and rioted inside the jail. Militants attacked it from outside with rocket-propelled grenades. A suicide bomber driving a car packed with explosives blasted his way through the main gate.

When security forces backed by helicopter gunships finally regained control early the following morning, more than 500 convicts, among them senior al Qaeda operatives, were on the run, eliciting an international alert from Interpol which described the jailbreak as a major threat to global security.

Three years after U.S. troops pulled out, declaring the mission of restoring peace more or less complete, Iraq is no longer a post-conflict nation dealing with residual violence. It is now, once again, a full-blown sectarian war zone, with armed factions that hold territory and kill civilians at will.

A week on from the jailbreak the litany of death accelerates: 17 car bombs in Shi'ite areas killed at least 60 people in a single morning on Monday. In one, in Baghdad's Sadr City Shi'ite district, a driver pulled up in a van promising work for day labourers. He packed them inside and blew the vehicle up.

"Somebody tell me please why poor labourers are targeted?" asked Yahya Ali, a worker who was standing nearby. "They only want to take food to their families."

In a statement this week, the Interior Ministry at last acknowledged what most Iraqis have long since understood: "The country is currently facing an open war launched by bloodthirsty sectarian forces that aims to plunge the country into chaos."

The jailbreak has revealed that Iraq's own security forces - trained and equipped by Washington with nearly $25 billion and numbering more than a million strong - are outmatched against foes who once took on the full might of the United States.

"Although you've got the numbers, the kit and the capacity in place, the Iraqi military is still not a coherent force that can coordinate its intelligence collection with action," said Toby Dodge at the London School of Economics, who has written several books on Iraq.

DAILY CARNAGE, OIL CREWS KILLED

Since the government declared Iraq's civil war over years ago, Iraqis have grown used to daily carnage. Throughout the years since the last U.S. soldiers withdrew, coordinated bombings still occurred every few weeks.

But however grisly the attacks, the government was always able to maintain that they were the work of isolated cells of Sunni militants, capable of killing civilians but not much else. Oil production was steadily increasing, elections were held and the government was growing richer and more capable.

Now, however, that improving trend has been reversed.

Coordinated waves of strikes that kill scores of people have become routine. Oil output has fallen, in a large part because insurgents are blowing up pipelines and killing repair crews.

In April, the monthly civilian death toll rose above 1,000 for the first time since 2008. The three months that followed have each been deadlier than any in the five years before April.

The culprit for nearly all of the killing is al Qaeda - the same local branch of the international Sunni Muslim network which U.S. forces and their allies defeated in the bloodiest phase of the war that followed the 2003 U.S. invasion.

In the years after the United States vanquished Sunni dictator Saddam Hussein, al Qaeda seized control of much of western and northern Iraq and waged a campaign against U.S. forces and Shi'ite militia. It was finally beaten during the "surge" ordered by President George W. Bush in 2006-2007, when U.S. troops organised tribal Sunni militia groups, known as "Sahwa", which drove out the Islamist fighters.

In 2008, the Iraqi government defeated the Shi'ite militia that controlled much of the south, and by the end of that year Baghdad was able to declare Iraq's civil war over. Newly-elected President Barack Obama could fulfill his campaign pledge to withdraw American troops. The last departed at the end of 2011.

Al Qaeda went underground, still killing a few hundred civilians a month but no longer capable of holding towns and villages with its stated aim of setting up a state ruled by the strict dictates of mediaeval Sunni Islam.

Sunnis, the majority elsewhere in the Arab world but a minority in Iraq, frequently bristled at the rule of Nuri al- Maliki's Shi'ite-led government, but seemed unlikely to break off once again into open revolt. But that has changed this year with the intensification of civil war next door in Syria, fought on the same sectarian lines as Iraq's.

Since last year, Iraq's al Qaeda branch has merged with one of the most powerful Sunni Islamist rebel groups in Syria to form The Islamic State in Iraq and the Levant. The group now controls towns and villages on both sides of the desert frontier, with access to funds, weapons, recruits and a cause that resonates widely, all to a degree unseen since 2007.

"BREAKING THE WALLS"

The combined Iraqi and Syrian group claimed responsibility for the Abu Ghraib jailbreak, issuing a statement that described it as part of a mass prisoner-freeing plan by its leader Abu Bakr al-Baghdadi, called "Breaking the Walls".

The success of the jailbreak at Abu Ghraib owes as much to the crumbling loyalty of the security forces as it does to the capabilities of the fighters who mounted the operation.

"It was 99 percent an inside job," said a senior Iraqi police official on condition of anonymity. "We found TNT inside the jail. Some prisoners managed to convert soap and water bottles into IEDs (improvised explosive devices)."

Investigators also found laptops and mobile phones in the prison cells, indicating the inmates had been in direct contact with their comrades all along. Memory cards had been removed from surveillance cameras by the guards.

"Unfortunately guards who work in these places are facing serious temptations, mostly money and women," the officer said.

Militants had warned residents in the surrounding area two days in advance of their plans to storm Abu Ghraib. Several officials said the security services had received intelligence about the operation, but failed to act on it.

Once the prisoners scaled the walls, bridging the razor wire with their mattresses, cars were waiting to whisk away the highest-profile al Qaeda members, probably to neighbouring Syria, where they will be welcomed as heroes by fellow militants fighting to overthrow President Bashar al-Assad.

"The attacks on Abu Ghraib and Taji prisons will undoubtedly prove hugely significant in terms of the long-term sustainability of al Qaeda operations in the Levant," said Charles Lister, an analyst at IHS Jane's Terrorism and Insurgency Centre.

The intensification of the insurgency is "very worrisome," acknowledged former U.S. ambassador to Iraq James Jeffrey, who oversaw the withdrawal of troops and is now a visiting fellow at the Washington Institute for Near East Policy. He said Iraq still has strong specialised capabilities in counter-terrorism, but its regular security forces require training.

The senior federal police officer familiar with the Abu Ghraib investigation said the security forces were no match for al Qaeda and could not keep pace with the insurgents' switching tactics and targets.

"We believe that al Qaeda leaders are aware of these weaknesses and they are exploiting them," said the officer.

"INVISIBLE MEN"

In interviews over the past week with Iraqi intelligence and military officers of all ranks, many lamented a culture of corruption reaching from bottom to top, making the security forces incapable of fighting a sustained insurgency.

"Now, everyone knows whoever pays the most gets the post," said a high-ranking military officer.

Having paid to secure their positions, senior officers extort from those beneath them to cover the expense, while lower rank officers in turn take bribes to compensate themselves and pay their superiors to go on leave.

Several officials said some intelligence officers were too busy blackmailing the owners of unlicensed nightclubs and other businesses to gather information that might thwart an attack.

"There is no national spirit," said a senior intelligence officer on condition of anonymity. "Bribery is very common ... and security posts have turned into a tool to make a fortune, not to serve the country."

As the inside job at Abu Ghraib showed, militants count on security officials to take bribes and turn a blind eye to their activities, or even facilitate them by leaking information and providing badges that exempt the holder from being searched at checkpoints, a senior intelligence officer said.

"Al Qaeda is paying huge sums of money to some security officials here and there," the intelligence officer said.

In high risk areas, some soldiers give two thirds of their monthly salary to the officer in charge to be excused from duty. Others have simply fled their units but their names remain on the register so the commander can pocket their salaries, soldiers and officers said.

"We have more than 20 soldiers called the Invisible Men," said Haider, a junior military officer serving in the northern city of Mosul, where al Qaeda has a foothold. "Their names are on the payroll, but they are not here".

Those who complain can find themselves dispatched to danger zones. Murtadha said around 50 soldiers from his unit had been sent to "hot areas" in recent months for raising objections.

OLD GUARD

The military's loyalty is likely to be further tested soon: some 65,000 army officers held over from Saddam's time now face an uncertain future after the appointment of a hardline Shi'ite to head the body given the job of purging state institutions of people with links to the former dictator's banned Baath party.

"All they are waiting for is official notification of dismissal or retirement," said another senior military officer.

"They feel they are abandoned by the state, and everything they did for the last ten years was not enough to prove that they are Iraq's men, not Saddam's men."

The rank and file of the Iraqi army is drawn from the country's Shi'ite Muslim majority and faces recalcitrance if not outright hostility in Sunni-dominated areas.

A manhunt was launched in the villages surrounding Abu Ghraib after the jailbreak, but a military officer said residents refused to cooperate.

Some Sunni officers have acknowledged that they are disinclined to go after members of their own sect.

"I gave my soldiers an order not to pursue the escaped prisoners," said Taha, a Sunni officer who was on duty in Abu Ghraib on the night of the jailbreak.

The worsening Sunni insurgency could prompt Shi'ite militia - disarmed since 2008 - to again take up arms to defend themselves. A senior leader close to anti-U.S. Shi'ite cleric Moqtada al-Sadr told Reuters his Mehdi Army militia was prepared to remobilise and defend Shi'ites if the security forces failed.

Meanwhile, in the western province of Anbar, where Sunnis who resent Shi'ite domination since Saddam's overthrow have been protesting against Maliki since late last year, some celebrated the prisoners' escape.

Those in the area who once helped the Americans defeat al Qaeda say they now fear for their lives.

($1 = 1163.5000 Iraqi dinars) (Additional reporting by William Maclean and Isabel Coles in Arbil; Writing by Isabel Coles and Peter Graff; editing by Janet McBride)

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