By Ned Parker and Suleiman Al-Khalidi

ARBIL Iraq (Reuters) - Sheikh Ali Hatem Suleiman, one of the leaders of the Sunni revolt against the Shi'ite-led government of Iraq, sat cross-legged on a couch last month, lit another Marlboro Red, and discussed the struggle with visitors from his home city of Ramadi, where the uprising began late last year.

Instead of taking delight in the rebellion's progress, though, the 43-year-old crown prince began lamenting the fact that Iraq's patchwork quilt of ethnicities and religions was being torn apart. "How do we guard what we still have?" he asked his visitors.

The revolutionary sheikh's doubts may seem surprising. Over the past seven months the Sunni armed factions which Suleiman helps lead, and their allies in the far more extreme al Qaeda offshoot known as Islamic State, have captured most of the north's largest Sunni cities. The battle against Prime Minister Noori al-Maliki in Baghdad has spread north and east and threatens to fracture Iraq altogether. In late June, Islamic State declared a new Caliphate.

Suleiman has become one of the public faces of the rebellion. But the brash figure also encapsulates the contradiction at its heart, and his story explains why Iraq will be so difficult to put back together.

The alliance between Sunni tribesmen, nationalists, old Baath regime loyalists and military veterans on one side and Islamic State on the other is based almost entirely on a mutual hatred of Maliki's Shi'ite government and a desire for an independent Sunni region.

But like most Iraqi Sunnis, Suleiman is no Islamic extremist. He helped crush an earlier incarnation of al Qaeda in Iraq. And he was disturbed recently by the news that tens of thousands of Christians were fleeing the city of Mosul after an Islamic State ultimatum that they should convert, leave or be put to the sword. The notion was an affront to Suleiman, who grew up in cosmopolitan Baghdad and has often spoken publicly of the need for tolerance.

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In a series of interviews since the fall of Mosul in early June, Suleiman described how Islamic State fighters and his Sunni rebels gradually came together. He expressed deep concerns about the ability of the groups he leads – they identify themselves as 'tribal revolutionaries' – to stand up to their more extreme allies, who operate in both Syria and Iraq and are sometimes known by the acronym ISIL.

"If any place is open, ISIL will take it over," he said. "ISIL isn't strong compared to the tribes, but they are strategic. They have military equipment and they use it against the (tribal) revolutionaries."

The rise of Islamic State has helped the tribes, but Suleiman said it also threatens them. The stronger the Islamists grow, he said, the more likely the purely nationalist aims of many of his Sunni followers will be eclipsed by religion.

The tribes and their militarised offshoots greatly outnumber the jihadis, both in the overall populace and in men under arms. But Islamic State is already wooing Sunni factions with massive hauls of American and Russian weaponry seized on the battlefield, and revenue from oil fields it controls in Iraq and Syria.

The balance of power between the Islamic State and more nationalist-minded figures like Suleiman will help determine the future shape of Iraq's Sunni regions, and whether reconciliation is possible with the country's Shi'ite majority.

"Is this a revolution or terrorism?" one of his followers asked late that night in Suleiman's Arbil villa.

"It's a revolution," Suleiman answered, "but we have problems."

A MORE HOPEFUL TIME

In some ways Suleiman is a reminder of a more hopeful era, a pioneer of the 2006 revolt against al Qaeda and the U.S.-backed effort to reintegrate the Sunni community into Iraq's political mainstream.

The mercurial and outspoken crown prince took on his leadership position when his father died, two years before the fall of Saddam Hussein.

His tribe, the Dulaim, numbers between two and four million. As is common in Iraqi tribes, members come from both the main denominations. Most are Sunni, with 300,000 to 400,000 Shi'ite.

Centered in the sprawling western province of Anbar but spreading north of Baghdad as well, the Dulaim is one of the

largest tribes in Iraq and a powerful social, political and economic force, with ties to royal families across the Arab Gulf and the elite of neighboring Jordan. It was a foundation of Saddam's Sunni-dominated regime, with members serving in the military and government. Today, it remains a bellwether of Sunni tolerance for Iraq's majority Shi'ite-led government.

The world Suleiman inherited was different from his father's. After the U.S.-led invasion in 2003, his first job was to preserve the Dulaim's political power amidst a brutal Sunni insurgency. That rebellion drew on his kinsmen and targeted both the Americans, who angered Iraqis with mass arrests and indiscriminate force, and the new Shi'ite political elite, which seemed intent on marginalizing Sunnis because of their role in Saddam's abuses.

Suleiman kept a distance from the insurgency, but did not condemn it. He later told a U.S. military historian "mistakes were made on both sides."

BROKEN ALLIANCE

The young Sunni had sartorial flair. He wore v-neck sweaters with immaculate white dishdashas and a keffiyah held perfectly in place. He looked the part of a tribal leader, with sharp brown eyes and high cheekbones. He had a talent for speeches and his title of crown prince inspired respect and loyalty.

In early 2005, his Uncle Majid, who had served as his regent, fled for Jordan. Suleiman found himself alone navigating both the American military presence and the Iraqi arm of al Qaeda, which began killing its way through Anbar and Baghdad.

That campaign ended in 2006 when Suleiman and a group of men in their twenties and thirties used money and weapons from the Americans to take on al Qaeda. Sunnis and Americans alike called the movement the Awakening.

U.S. officers credit Suleiman with rallying tribes from Ramadi to the farmlands around Baghdad and further north. Even today, in some houses outside Baghdad, tribal sheikhs adorn their homes with pictures of the crown prince.

"He pushed the fight against Qaeda," said Colonel Rick Welch, a retired Special Forces officer, who worked closely with Suleiman.

Suleiman exhibited a flair for dramatic gestures. Once, after a car bomb slammed into his office in Baghdad and killed several of his guards, he walked out unscathed. He welcomed the attack, he told the Americans. "We have a saying: When you are already wet don't be afraid to go out in the rain."

When many Sunnis still feared Shi'ite militias, he visited the Shi'ite slum of Sadr City in Baghdad's east, walking from his Jeep into a swarm of thousands of people, Sunni and Shi‘ite alike.

He could also be pragmatic and direct. While most Sunnis despised Prime Minister Maliki from the outset, the crown prince gambled on an alliance with him. It lasted three years before collapsing in 2010 under rising sectarian tensions, acrimony and pride on all sides.

While it lasted, Suleiman thrived on his relationship with Maliki. He was awarded government contracts and bet on the premier as the man for the future. He put forward his youngest brother, Abdul Rahman, to run for parliament on Maliki's slate.

When Rahman failed to win, and Maliki played up his Shi'ite Islamist identity, the alliance frayed. Suleiman took to satellite television to lambast Maliki and what he called the prime minister's Iranian backers.

In 2011, Maliki sent troops to Suleiman's riverside offices in Baghdad and evicted him. The prime minister also coaxed back Suleiman's uncle Majid from Amman and provided him a house and guards, in an effort to erode Suleiman's stature.

Those around Maliki still dismiss Suleiman as a terrorist and a loud mouth. Haidar Abadi, a senior member of Maliki's Dawa party, mocked him as "one of those people talking to the media" from outside the battle zone. He said the government was talking to more influential tribesmen on the ground who could tip the balance.

THE TRIBAL MENTALITY

Even after the Sunni victory over al Qaeda, the Shi'ite-dominated government kept arresting Sunni opponents. Thousands were imprisoned on blanket terrorism charges and held for years without trial.

A year after the U.S. military pulled out of Iraq, many people had lost hope that life would improve; mass demonstrations erupted after the arrest of a prominent Sunni politician's bodyguards. Suleiman threw himself into the protests, joining crowds or huddling with tribal figures and religious clerics.

The tribal leader swung between war and negotiation. He plotted a military confrontation as early as February 2013, convinced that the government would attack Sunni demonstrators. That April, government security forces shot dead at least 50 demonstrators in the northern city of Hawija, sparking violence around the country. In the following weeks, Suleiman mobilized a militia to defend the protesters.

Tensions rose. Islamic State, born from the ashes of al Qaeda in Iraq, began a series of suicide bomb attacks against Baghdad. Last December, Maliki invaded Ramadi to clear the protest camps. The war in Anbar between the government and tribes had begun and Suleiman's militia was transformed into a full-fledged fighting force.

Suleiman commanded fighters in Ramadi and dodged Iraqi government attempts to kill him. A series of failed attacks by helicopter gunships firing what Suleiman called U.S. missiles confirmed his status as a voice of the revolt.

"SO MUCH BLOOD"

Maliki's confidantes privately felt the war would prove popular with Shi'ite voters in April's national election. The coalition to which his party belongs did win the biggest share of the vote. But on the ground the offensive turned into a drawn-out fight. In its first six months, at least 6,000 government soldiers were killed and some 12,000 deserted, according to medical officials and diplomats.

A tribal rival to Suleiman, Ahmed Abu Risha, broke with the uprising, and joined Maliki. Abu Risha now heads a new Awakening and works in tandem with his own uncle, Iraq's defense minister Sadoun Dulaimi.

The chaos also presented an opportunity to the Islamic State, which sent forces into Ramadi. At first Suleiman and his followers ignored the more radical organization but by April the two groups had begun fighting alongside each other.

Suleiman said an alliance was a necessary evil. He may have once fought al Qaeda, but he recognized that Islamic State had tactical experience from the civil war in Syria. His drift away from moderation matched popular Sunni feeling. He and his followers believe that, at a minimum, Baghdad must grant concessions before the tribes confront the Islamic State. Sunnis should run their own affairs and security and receive a share of oil revenues from the central government, they say.

Suleiman nominally heads two large organizations – the Anbar General Military Council and the Tribal Revolutionaries – that loosely connect about 10 different armed factions. Some factions believe in conservative Islamist principles and an Iraqi Sunni identity. Others are offshoots of Saddam's old Baath party regime. What links the factions is military leadership from former officers.

"The participation of officers facilitated matters," said an Islamic cleric associated with the Sunni insurgency. "They are the brains who fought the 1980s war with Iran, so the presence of one officer in a group of 30 to 50 people was enough. He is the one who does the planning."

Suleiman, who is often called Sheikh Ali or Ali Hatem, straddles the groups and provides a badge of legitimacy: His grandfather fought in the nation's 1920 uprising against the British and was a friend of King Faisal, the founding father of modern Iraq.

"The revolutionaries need someone to stand out such as Ali Hatem," the cleric said. "He grasps the tribal mentality and talks in a language that tribes relate to and understand."

But his powers have limits.

"If Sheikh Ali had agreed with people to stop the revolution, would it stop? I don't believe anyone would heed his call," the cleric said.

"BARING THEIR TEETH"

The Islamist State may be smaller – somewhere between 8,000 and 20,000 fighters, compared with an estimated 30,000 Sunni tribal and nationalist fighters – but it increasingly dominates the insurgency. As the Iraqi security forces imploded in June, other Sunni armed factions joined the radical group's gallop through Mosul, and to within 100 miles (160 km) of Baghdad.

"Leadership is in the Islamic State's hands," said onetime Sunni insurgent, Abu Azzam al-Tammi, now an adviser to Maliki. Suleiman, said al-Tammi, was a "genuine tribal and popular figure," one of the "revolutionaries with genuine demands."

But, he believes, the Islamic State will ultimately defeat all other Sunni groups. He also questioned Suleiman's ability to marshal large numbers amidst the sea of Sunni factions.

Suleiman's brother Abdul Razzaq said the Islamic State had bared "their teeth" and won over broad segments of the population. "They have better everything: ammunition and new vehicles."

An intelligence officer in Ramadi told Reuters Suleiman had fooled himself in championing a war he could not win. "When he speaks about the rebels controlling land he means, without saying it, ISIL," the officer said.

A fighter loyal to Suleiman agreed, telling Reuters that any distinction between the Sunni tribes and Islamic State has effectively vanished. The groups now share weapons from the Islamic State's haul of Iraqi military equipment, he said.

For now, Suleiman rules out confrontation with the Islamic State because Maliki and his special forces and Shi'ite militias remain the bigger threat. "We have bad people in our Sunni areas, but who gave the government the right to bring militias to our land to kill our people?" Suleiman demanded of his guests with a smirk. "And they ask me about the Islamic State."

Amid intense bombardments by the government in May, Suleiman moved to Arbil, capital of Iraqi Kurdistan. He swore to return to Ramadi, but has remained in the north, citing the need for political meetings and travel to Qatar and the United Arab Emirates to rally Gulf Arabs to his cause. Some say his extended exile has damaged his reputation; others disagree.

One insurgent in Baghdad described Suleiman as inspiring. In Diyala province, a fighter who had defected from the remnants of the government-funded Sunni Awakening movement called him one of the most-respected tribal figures in the country.

A U.S. military officer, speaking on condition of anonymity, said he believed if Iraq broke down along sectarian lines, the future of Iraq's Sunni regions rested with those like Suleiman who bore a badge of tribal legitimacy.

"Ali Hatem is the only serious Anbari sheikh," the officer said.

"THE PEOPLE ARE GOING TO LOSE"

Suleiman himself is realistic.

In early May, he sat in an Arbil hotel room sipping coffee and fiddling with his iPhone. He recounted plotting ambushes against Iraqi special forces, which he said killed more than 100.

Fresh from the battlefield, his skin looked grey and his frame emaciated. An attempt at mediation between the government and Sunni tribes in Anbar had just failed. Mosul would not fall for another month, but Suleiman already sensed Iraq was headed toward a major change. He saw no way to halt the momentum or to remove himself from the process.

He sketched in broad strokes much of what has since transpired: An intensified fight by Sunni insurgents for Baghdad's rural districts and attacks on the country's critical natural resources – oil fields, pipelines and dams.

"All the communities will be divided. It is going to be too late and the people are going to lose," he predicted. Civilians across Iraq's Sunni region would soon be trapped in a war between the government and a multitude of armed factions.

He lay back on his couch and fell silent, his baritone voice for once not bragging about the power of tribes and armed groups. He blamed Sunnis close to the government for sabotaging the chance at compromise.

"Who hurts the Sunnis a lot in Iraq, who damages them? Do you know who?" Suleiman asked. "The Sunnis themselves."

(Parker reported from Arbil and Al-Khalidi from Amman; Additional reporting by Isra' al-Rube'ii in Baghdad; Edited by Simon Robinson)