Lakhdar Brahimi is a diplomat by trade and a olitical conjurer by necessity. An 11-year veteran of the U.N., Brahimi, 70, has the unenviable job of trying to make normal governments suddenly appear in places where in the past normal was defined at the barrel of a gun. In 2001 U.N. Secretary-General Kofi Annan dispatched Brahimi to cobble together a new government in Afghanistan after the U.S. military had run the Taliban out. Today that government controls the capital city of Kabul and not much else, but make no mistake: success in the places where he works is a relative term. That's why when George W. Bush needed to prove, in the midst of mounting U.S. casualties and spiraling Iraqi impatience, that the U.S. really does have a plan for returning sovereignty to Iraq by June 30, he unmasked a man most Americans had never heard of but in whose diplomatic skills the Administration is staking Iraq's political future—and to a significant degree, its own. "We're working closely with the U.N. envoy Lakhdar Brahimi and with Iraqis to determine the exact form of the government that will receive sovereignty," Bush said in his news conference last Tuesday. Creating a government that can win the support of the Iraqi public and run Iraq until elections, tentatively planned for next year—a balancing act that has bedeviled the U.S. for months—was going to be, in effect, the Great Brahimi's next trick.

Having given Brahimi its public blessing, the Administration had little choice but to stand aside and let him call the shots. After 11 days in Iraq, Brahimi announced in Baghdad last week that he essentially intended to take a year of political planning by the U.S, crumple it into a ball and toss it into the waste can. He had his own ideas about how Iraq should be governed and who should govern it. Early this month Secretary of State Colin Powell said expanding the 25-member, U.S.-appointed Governing Council was the most practical approach for transferring power after the Coalition Provisional Authority disbands on June 30. But Brahimi's plan, which he will present for Annan's approval this week, takes as its starting point the demise of the council. In its place would be a caretaker government comprising technocrats selected through a process the U.S. will participate in but not run. In the not too distant past, Brahimi's plan B would have infuriated some U.S. policymakers, especially civilian officials at the Pentagon, who had dismissed the idea of ceding any control over Iraq to the U.N. But last week the White House could hardly wait to throw its support behind Brahimi's proposals. On Friday Bush stood with British Prime Minister Tony Blair and told reporters who asked about their political plans for Iraq to seek out his new point man. "That's going to be decided by Mr. Brahimi," Bush said. "You are watching a process unfold, and you won't have to ask that question on July 1."

The fury and chaos of the past three weeks in Iraq have had a profoundly sobering effect on Washington. With Shi'ite unrest spreading in the southern part of the country and fierce military battles erupting in Fallujah, the city west of Baghdad that has become the core of Sunni resistance, the Administration risked completely losing control in Iraq. The U.S.'s certitude that it could pacify Iraq on its own has been replaced with a new deference to the U.N., hopeful talk about a fresh Security Council resolution that would ratify the U.N.'s political role in Iraq and frank acknowledgment that removing the American face from the year-old occupation is vital to defusing the insurgency and steering Iraq toward self-rule. The instant embrace of the Brahimi plan was an indication of how little time the U.S. and its allies have to lose if they hope to get help sorting out the mess. "This is a historic struggle," Blair said in the Rose Garden last week, "and we're at a very, very crucial moment."

The outcome is still far from settled. What started as a U.S. counteroffensive against insurgents on two fronts had by the end of last week become a tense standoff in Shi'ite- and Sunni-dominated regions. U.S. officials held talks with Iraqi intermediaries aimed at suspending coalition military assaults, which many pro-American Iraqis believed was doing more harm than good in winning hearts and minds across the country. The diplomatic tack looked more likely to bear fruit in the Shi'ite-dominated south, where fighters loyal to the young Shi'ite cleric Muqtada al-Sadr seemed to be abiding by a cease-fire, even as U.S. troops staged outside the holy city of Najaf. In Fallujah, by contrast, rebels killed nine U.S. Marines in a breach of the truce declared by U.S. commanders. A man who claimed to have participated in the insurgency in Fallujah was interviewed by Time and gave a chilling description of a recent attack on the Marines there. He said when three U.S. tanks, six humvees and about 70 Marines entered the Nazar district of Fallujah, a group of 25 insurgents ambushed them with a Russian-made PK machine gun, an rpg and AK assault rifles; destroyed one tank and disabled another; and fled before the Americans could return fire. On Saturday coalition forces unexpectedly announced that the main highways leading north and south from Baghdad had been closed indefinitely to civilian traffic. The official reason given was repair work, but a coalition military source said the roads were "very dangerous and under intense enemy pressure."

Any hope that the U.S. could soon impose order was further tempered by the insurgents' proclivity for kidnapping foreigners, including U.S. soldiers. On April 16 al-Jazeera broadcast a videotape of Private First Class Keith Maupin, 20, of Batavia, Ohio, surrounded by fighters who had taken him hostage after the convoy in which he was traveling on April 9 was attacked outside Baghdad. Other members of that convoy, which included private contractors, are still missing. U.S. officials say the Administration's acquiescence to Brahimi's plan was not a response to the recent turmoil. Administration sources say the U.S. decided earlier this year to throw in its lot with the U.N. when it came to deciding what would happen post-June 30. Working with the Governing Council, Brahimi in February helped broker the transitional administrative law, which established guidelines under which an interim Iraqi government would assume power. Although the U.S. had initially wanted to turn sovereignty over to an expanded Governing Council, Brahimi— backed by Robert Blackwill, National Security Adviser Condoleezza Rice's deputy in Iraq—forged ahead with negotiations with Iraqis over an alternative. As the June 30 deadline drew closer, Powell told Brahimi that the Administration was willing to let him do anything, as long as he did something.

By the time Brahimi returned to Iraq two weeks ago, the White House was fully mobilized behind his efforts. Blackwill accompanied Brahimi on his trip. Blackwill's charge was to make sure no one could sabotage Brahimi's work—in particular, civilians in the Pentagon who felt their control slipping and members of the Governing Council who tried to block Brahimi's return, knowing he was inclined to do away with them and start fresh.

That, for the moment, seems to have been accomplished. But now comes the much trickier task of making Brahimi's proposal work. While many of its details are still works in progress, the plan calls for Brahimi to appoint a panel of Iraqis who would help the U.N. name a President, two Vice Presidents, a Prime Minister and a group of technocrats to run ministries and prepare the country for elections in early 2005. Critically, it attempts to bring Sunni Muslims—who make up about 30% of Iraq's population and who ran Iraq under Saddam Hussein—back into the political process. Brahimi last week pointedly took issue with the U.S.-sponsored campaign of "de-Baathification," which stripped most members of Saddam's Baath Party of their old government jobs. "Professionals who are sorely needed in the country have been dismissed," Brahimi said, making clear that Baathists without blood on their hands would be welcomed back into the government. U.S. State Department officials have long argued that there would be no security in Iraq unless the Sunnis were offered an alternative to insurrection. By giving Baathists a seat at the table, Brahimi hopes to co-opt them.

It won't be easy. For one thing, the decision to involve even low-level members of the former regime is deeply controversial among Iraq's majority Shi'ites, who suffered hugely at the hands of Baathists under Saddam. Brahimi has yet to secure the backing of Iraq's most important Shi'ite, Grand Ayatullah Ali Husaini Sistani, who has so far refused to endorse any of the plans for creating a new Iraqi government. Brahimi has conferred with Sistani's son; Brahimi's spokesman, Ahmad Fawzi, does not rule out the possibility that Sistani will demand guarantees that, among other things, the future government limit the ability of Sunnis and Kurds to interfere with Shi'ite interests.

A U.N.-sponsored government won't automatically command the trust of the Iraqi public. The U.S. hopes the Brahimi plan will be acceptable by the simple virtue that it wasn't concocted by Americans or their allies on the Governing Council. But members of the post-June 30 government still have to be effectively blessed by foreigners—a point not lost on Iraqis. "They cannot fix a wrong with a wrong," says Salah Hassan Habib, 22, a butcher in a Shi'ite neighborhood in Baghdad. "The next government should be elected." The U.N.'s reputation in Iraq is hardly lustrous: ordinary Iraqis suffered for more than a decade under sanctions enacted in the U.N.'s name. Also, since Saddam's fall, the newly free Iraqi press has uncovered evidence of massive corruption in the U.N.'s oil-for-food program. And unless the security situation improves dramatically in the next 10 weeks, daily life under the occupation probably won't feel much different. The U.S. announced last week that it intends to keep 135,000 troops in Iraq for at least the next three months, 30,000 more than U.S. Central Command's projection for May. Both Bush and Blair reaffirmed their determination to proceed with the June 30 deadline, come hell or high water. They don't want to risk a delay in handing Iraqis a semblance of sovereignty. But June's transfer of power to whatever government ultimately takes shape looks increasingly like a symbolic event. As long as anticoalition forces maintain control over parts of the country, U.S. commanders have no choice but to keep troops on a combat footing. Although the violence in Iraq diminished somewhat last week, neither the U.S. military nor Iraqi intelligence sources believe that is likely to last long. A senior Iraqi intelligence source says flatly that the cycle of violence will escalate, not diminish, in the weeks ahead, according to his agency's intelligence reports. Furthermore, there appears to be evidence that foreign militants, including al-Qaeda operatives, are helping direct the Iraqi resistance. Another Iraqi intelligence official claims he is "60% to 70%" sure that Abu Mousab al-Zarqawi, the Jordanian believed to be running al-Qaeda's operations in Iraq, has been involved in the Fallujah fight.

For the U.S., a grim possibility is that insurgents are exploiting the relative lull to prepare for new offensives. An insurgent interviewed by Time last week says the bulk of his forces have used the ruse of recent truce talks to pull out of Fallujah in preparation for coming operations that will target Baghdad. Teams have been left behind in Fallujah to harass U.S. troops and provide cover for other insurgents to leave the city and head for the capital.

If that's a glimpse of battles yet to be fought, it is hardly reassuring for Brahimi and his newly ardent American backers as they try to drag Iraq toward their ultimate goal: holding national elections, scheduled to take place in January. That task may prove to be the most daunting of all, given that the U.N. will need monitors on the ground soon to help prepare for a vote. The U.S. has been quietly sounding out other countries to see whether they would help staff security teams protecting U.N. election officials. "Some countries that haven't [yet] contributed troops might be willing to," says a State Department official. But turning that hope into reality requires, at minimum, a sustained reduction in the violence of the past few weeks. While Brahimi has offered the Bush Administration a plan B, the U.S. has plenty of work left to do in Iraq if it hopes to avoid plan C.

—Reported by Brian Bennett, Meitham Jasim, Paul Quinn-Judge and Michael Ware/ Baghdad and Massimo Calabresi and Adam Zagorin/Washington

• Bill Powell