Two months after election and six weeks after results were announced, we are farther from figuring out the shape of the new government than we were on election eve.
The largest three blocs (Allawi's Iraqiya, Maliki's SoL and Hakim/Sadr's INA) are struggling to wrestle the initiative from one another. Recent developments over the last week appear to have given Maliki the advantage. Maliki has tried to keep his options open by negotiating on multiple tracks with both INA and Iraqiya. He recently agreed to enter a coalition with INA to form the largest bloc and consequently the new government. A few days after that reports came that he's been engaged in serious negotiations with Iraqiya.
His strategy appears to be working. Today the Sadrists, who had been adamant in their refusal to let Maliki stay in office are saying that they don't have redlines regarding any future PM candidate, including Maliki.
Maliki has played a good game of political brinkmanship that could enable him to extract concessions from his rivals. His deal last week with INA seems to have convinced Iraqiya that maybe offering Maliki a second term while a member of Iraqiya become president is better than being alienated altogether while INA and SoL get everything. On the other hand, the recent news about a SoL-Iraqiya deal may have convinced the INA that it's better to accept Maliki's PM candidacy than to watch him form a grand nationalist coalition with Iraqiya--a coalition that could in theory rule without the votes of INA or even the Kurds.
The decision now belongs to neither the largest bloc (Iraqiya) nor to any of the "kingmaker" groups (INA, Kurds)--it's pretty much in Maliki's hand. Choosing to form a cohesive nationalist government with Iraqiya (while giving minimal shares of power to the Kurds and INA) would be the best for Iraq's democracy, but it would anger Tehran and its proxies who bring a gun to the negotiations table.
On the other hand, choosing to go with INA and the Kurds (and giving minimal share of power to Iraqiya, in a replication of the 2005 government, which was weakened by compromises) would certainly be a setback to democracy. Ironically, this path doesn't guarantee that Sadr won't revive his quest for power because with 40 seats in parliament and several cabinet posts, he will have unprecedented access to resources to exploit in his Iranian-backed campaign to foil democracy in Iraq.
It seems to me that the new government is bound to have problems with Sadr, and armed confrontation may become inevitable as was the case two years ago. If I were Maliki, I'd choose the strong government option and join Allawi--that would put the government in a better position to win any future confrontation with Sadr or other menaces .