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When President Obama announced on Tuesday night that "Operation Iraqi Freedom is over and the Iraqi people now have lead responsibility for the security of their country," he was signaling an end to the U.S. military's effort to remake Iraq — "nation building," as it's sometimes known. "As our military draws down," he explained, "our dedicated civilians — diplomats, aid workers and advisers — are moving into the lead to support Iraq as it strengthens its government, resolves political disputes, resettles those displaced by war and builds ties with the region and the world."

But the fact that no government in Iraq has been formed almost six months after national elections, despite the increasingly urgent cajoling of U.S. officials, is but the latest indication of just how limited U.S. political leverage in Iraq has become. Politically and geopolitically, Iraq is no longer a work in progress; Iraq is what it is. And that is a weak state beset by a long-term pattern of political crisis and vulnerable to the machinations of outsiders. The U.S. — whose remaining 50,000 troops are still by far the strongest armed force in the country — maintains a veto over military events in Iraq, but Washington's political influence is marginal. Iran, however, retains effective political veto power via its allies among the Shi'ite majority. It may not be influential enough to impose a client regime of its own in Baghdad, but Tehran can prevent the formation of any government that is aligned with Iran's adversaries, including the U.S.

The U.S. military remains responsible for defending Iraq's airspace and borders, and Iraq's chief of staff has admitted that his forces will need to have Americans around for at least another decade. But U.S. political leverage in Iraq began to decline sharply from the moment it first allowed the Iraqis to vote for their own government, in January 2005. That election was swept by an Iran-backed Shi'ite bloc, which formed a government with the support of the Kurds — the Sunni population boycotted the polls, and the U.S.-appointed incumbent Prime Minister, Iyad Allawi, scraped together just 14% of the vote. A year later, another Shi'ite sweep brought Prime Minister Nouri al-Maliki to power, although this time there was some Sunni participation. The third democratic election saw full Sunni participation, which helped give Allawi 24.7% of the vote — the largest single share, but only because the Shi'ite vote was split between al-Maliki's State of Law coalition (24.2%) and the Islamist parties of the Iraqi National Alliance (18.2%), whose most prominent leader is the radical cleric Muqtada al-Sadr. Since the election, those two Shi'ite blocs have agreed to vote together. But the ongoing deadlock is caused by al-Sadr's refusal to accept al-Maliki's remaining in power, even if al-Maliki's coalition dominates a government — and by al-Maliki's refusal to do a deal instead with Allawi's predominantly Sunni bloc.

This stalemate tells us some basic truths about Iraqi politics: Iraq's system of government, while democratic, is inherently unstable. The proportional-representation parliamentary system was expressly designed to avoid a strong central government because of the trauma of the Saddam Hussein era — and also to force coalition-building in order to ensure that all ethnic and sectarian groups are given a share of power. But seven years after Saddam's fall, political competition continues to operate largely on ethnic and sectarian lines, Iraqi politicians are deeply mistrustful of one another and the coalition-based system of governance has reinforced corruption and nepotism.

At the same time, while violence has been dramatically cut from before the U.S. surge, it remains ever present, and the danger of civil war persists. A key element in the success of the surge was the fact that Sunni insurgents in the Awakening movement were put on the U.S. payroll. But the Shi'ite-dominated government is inclined to dismantle these potentially threatening groups rather than incorporate them, and their sense of alienation is compounded by a belief that their bloc won the election but is being denied the right to form a government. The Iraqi military's ranks are predominantly Shi'ite, and it's far from certain that they would remain neutral in the event of a massive outbreak of communal violence.

The political crisis in Iraq, therefore, is not simply about establishing a government based on the March election results, as Obama suggested. Even if a government were patched together before the U.S. combat troops went home, it would have been an unstable one. The state continues to do a poor job of delivering basic services like electricity and collecting taxes, and its political system translates ethnic and sectarian competition for power and resources into a fragile equilibrium, beset by periodic crises and incapable of bold decisions. (An oil law mandating the sharing of revenues, for example, remains in political limbo almost four years after it was introduced.) The U.S. commander in Iraq, General Ray Odierno, publicly worried this week that continued deadlock could prompt a call for a new election. Another poll would be even riskier from a security point of view, with the likelihood of cheating increasing.

And that political power vacuum is being ably filled by Iran. Saddam's Iraq was a brutal dictatorship that privileged Sunnis over Shi'ites and Arabs over Kurds, but it also functioned as a bulwark and battering ram against Iran on behalf of neighbors like Saudi Arabia, which funded Iraq's war against the Islamic Republic. By inverting the domestic power equation — putting Shi'ites in charge, making the Kurds into kingmakers and marginalizing the Sunnis — the U.S. invasion also inverted the regional power equation. Iran, via its long-standing ties to the main Shi'ite parties, emerged as the dominant outside influence in Baghdad's politics. U.S. officials routinely grumble about Iranian meddling in Iraqi politics, but there's little they can do, because the vehicles for such meddling are, in fact, popularly elected Iraqi politicians. And Iran recognizes that if it can't impose a friendly government next door, the next best thing might be a weak government unable to threaten it in the way that Saddam did.

The Bush Administration launched the war assuming that Iraq would be the beachhead of a new Middle East, in which regional actors hostile to the U.S. and its allies would be swept away and a new era of democratic pro-American regimes would emerge to act as a counterweight against extremism. But instead, Iraq has emerged as a kind of high-stakes Lebanon — a politically fragile state that finds itself all too often as a battleground for regional powers. And that means the U.S. won't have left Iraq a more stable country until its neighbors, particularly Iran, Turkey, Syria, Jordan and Saudi Arabia — and, of course, the U.S. — can find a more stable basis for coexistence among themselves.

• Tony Karon
• Analysis: Even as the U.S. remains the supreme military power in Iraq, Iran has more influence over Iraqi politics