The Bush administration insists that the United States will meet the July 1 deadline for handing the government of Iraq to the Iraqi people. But many important issues remain unresolved, including the question of the new government being picked by appointed caucuses (the U.S. plan) or by direct elections (called for by the leading Shiite cleric, Ayatollah Ali al‐Sistani). As the deadline gets closer, the administration seems to be moving further away from its original vision of a democratic Iraq in America’s image. And two parties previously excluded from the process—the United Nations and Ayatollah Sistani—are now seen as key to the success of the transition. But even if the July 1 deadline is met, the question of a continued U.S. military presence still looms. How much responsibility does the United States have for rebuilding Iraq? Should the United Nations be more involved? What are the implications for U.S. foreign policy and the war on terrorism?