Interim Governing Council signed provisional constitution after series of delays caused by objections from Shiite members and by bloody attacks on Shiite pilgrims, which left over 100 dead 2 March. Constitution to take effect upon U.S. handover of power to transitional administration 30 June. Influential Shiite cleric Ayatollah Ali al-Sistani voiced opposition to document, saying it enshrines ethnic and religious differences, while other Shiites expressed concern over power given to Kurdish minority. Violence continued unabated, with attackers targeting Iraqis seen cooperating with Coalition. Blast at Mount Lebanon hotel 17 March killed 7; several other hotels targeted by rocket attacks. Four U.S. contractors killed in Fallujah 31 March; bodies hung from bridge by angry mob. Unease among U.S. allies as incoming Spanish PM Zapatero, in wake of deadly Madrid bombings, declared would withdraw troops unless they are given UN mandate by 30 June; and Polish president Kwasniewski said country was “misled” over WMD in Iraq. 350 Coalition soldiers, including 301 Americans, killed by hostile fire since declared end of combat operations on 1 May 2003.

Following fact-finding mission led by UN Special Envoy Lakhdar Brahimi, UN Secretary-General Kofi Annan said Iraqi elections not feasible before end of 2004 or early 2005. Grand Ayatollah Ali al-Sistani, country’s most powerful Shiite cleric, called for guarantee – possibly in form of UN Security Council resolution – that elections would be held by year end. U.S. acknowledged plan to select transitional assembly through local caucuses requires modification, but handover of power will go on as scheduled 30 June. Governing Council agreed on interim constitution; composition of transitional assembly yet to be decided. Violence continued with series of large-scale attacks mainly targeting Iraqis: On 1 February suicide bombers struck offices of Kurdish political parties PUK and KDP, killing 101, including several senior Kurdish officials. Two apparent suicide car bombs 10 and 11 February killed around 100 Iraqi men waiting in line for police and army jobs. Twin suicide attacks on Coalition base in al-Hillah 18 February left 11 Iraqis dead and dozens of Coalition soldiers wounded. 316 Coalition soldiers, including 267 Americans, killed by hostile fire since declared end of combat operations on 1 May 2003.

U.S. looking to amend plan for handover of power to provisional Iraqi government as pressure mounting for elections to be held in June. Pressure coming chiefly from Ali Hussein al-Sistani, leading Shiite cleric, and his followers: 100,000 marched through Baghdad 19 January. American and UN officials discussed possible modifications to original plan, which calls for transitional assembly to be selected by local caucuses rather than directly; all options reportedly back on table, including elections. Sistani said would not drop election demand unless UN agreed with U.S. contention that elections not feasible; UN assessment likely to be completed in February. Lakhdar Brahimi appointed special adviser to Kofi Annan and expected to devote much time to Iraq. Two-man team arrived in Baghdad to inspect security situation for potential UN return. Attacks continue unabated: 18 January suicide bombing outside CPA HQ killed 25, and attacks across Iraq 31 January left at least 18 dead. 300 Coalition soldiers, including 253 Americans, killed by hostile fire since declared end of combat operations on 1 May 2003.

U.S. troops captured hiding Saddam Hussein 13 December, setting off both clashes and celebrations in Iraqi streets. Impact of capture on anti-Coalition insurgency still uncertain; at present, attacks continue unabated, with 22 Coalition soldiers killed by hostile fire since capture. Day after capture, car bomb exploded in town of Khaldiya, killing 17 policemen. Attacks in Karbala 27 December killed 12, including 4 Bulgarian soldiers, 2 Thai engineers. U.S. followed up capture with large-scale arrests, claiming better intelligence, including from documents found with Hussein, helping piece together structure of resistance. U.S. says no decision made on whether new Iraqi war crimes court will try Hussein. Anger at U.S. move to exclude countries who did not send troops from bidding on reconstruction contracts; France, Germany, and Russia nonetheless agreed to major write-off of Iraqi debt, as did Britain, Japan, and others. UN Secretary-General Kofi Annan called 15 January meeting with Governing Council and U.S. to seek clarity about role they thought UN might play; said in 10 December report that security situation made quick return unlikely. 261 Coalition soldiers, including 214 Americans, killed by hostile fire since 1 May, declared end of combat operations

Major revision of U.S. political plan for Iraq, as timetable for handing over sovereignty moved up and decoupled from constitutional process. Under new plan, provisional assembly to be selected by local councils by 31 May 2004, and assembly to elect executive by 30 June 2004, at which time Coalition Provisional Authority (CPA) to dissolve. Adoption of permanent constitution and holding of elections left till 2005. Iraq’s most powerful cleric, Grand Ayatollah Husseini Ali al-Sistani, called for elections in June 2004, but expected to compromise. New plan emerged amid mounting pressure in Washington for exit strategy. Anti-Coalition attacks said to have decreased toward end of month, but sophistication increasing; November bloodiest month since start of war. Two helicopters, and likely third, shot down by insurgents, killing 39. Attackers also targeting U.S. allies: Italian military police HQ, in Nasiriyah, bombed 12 November, claiming 25, including 19 Italians. Seven Spanish intelligence agents and two Japanese diplomats killed 29 November, and two South Korean civilians shot dead following day. Meanwhile, international exodus from Iraq continues: Spain announced withdrawal of diplomats 4 November, and CARE Australia pulled foreign staff after grenade attack on its office 22 November. 229 Coalition soldiers, including 189 Americans, killed by hostile fire since 1 May, declared end of combat operations.

UN voted unanimously 16 October in favour of U.S.- sponsored resolution authorising multinational, American-led force for Iraq. But resolution unlikely to result in major contributions. Turkey offered up to 10,000 troops, but strong resistance to potential Turkish military presence from Iraqi Kurds. Significant but insufficient cash pledged at Madrid donors conference. Resolution set 15 December deadline for Iraqi Governing Council to lay down timetable for drafting constitution and holding elections. Meanwhile, intense violence continues to plague country, predominantly Sunni triangle. Wave of suicide bombings struck Baghdad Red Cross building and police stations 27 October, first day of Ramadan, killing at least 35 and wounding over 200. Barrage of rockets hit Al-Rashid hotel 26 October, where Deputy Sec. Defense Paul Wolfowitz staying. Hundreds of other attacks kept tensions high throughout month. 131 Coalition soldiers, including 120 Americans, killed by hostile fire since 1 May, declared end of combat operations. National Security Council under Condoleezza Rice reportedly taking increased role in post-war stabilisation effort.

Vigorous diplomatic manoeuvring at United Nations as U.S. pushes resolution authorising multilateral force for Iraq and seeks help in bearing cost of reconstruction. U.S. president Bush failed to garner support from foreign leaders in two days of talks at UN. France urging quick turnover of power to Iraqis; U.S. says proposed timeframe unrealistic: Colin Powell announced six-month deadline for new Iraqi constitution, with elections to follow sometime in 2004. In Iraq, violence continued. Aquila al-Hashimi, member of Iraqi Interim Governing Council, died after being shot by gunmen on 20 September. Two days later, a second suicide bombing outside UN headquarters killed two. UN continues to withdraw staff from Iraq. 192 Coalition soldiers, including 172 Americans, have died since 1 May, declared end of combat operations.

International Atomic Energy Agency (IAEA) found traces of highly enriched uranium at Iranian nuclear plant, but cautioned there are number of ways uranium could have got there. Iran’s nuclear energy program drawing increasing concern from international observers. U.S. also concerned about perceived Iranian interference in Iraq. Reformist coalition led by President Mohammed Khatami struggling to hold together until next spring’s parliamentary elections.