A U.S.-Iraqi security agreement spelling out how American troops and contractors operate was supposed to be in place over the summer, but the thorniest issues remain unsettled and neither side is budging.
Time is running out. The deal must be finished and ratified by Iraq's parliament before Dec. 31, when the U.N. mandate authorizing the U.S. military mission expires. Otherwise, there will be no legal basis for the U.S. presence in Iraq.
For President Bush, some of the pressure to get a fast deal has faded since Iraq is no longer a dominant issue in the presidential campaign.
For the Iraqi leadership, however, political crosscurrents have grown more complicated because of upcoming provincial elections and strong Iranian opposition to any security agreement.
Deputy Secretary of State John Negroponte and Iraqi Foreign Minister Hoshyar Zebari sought to put a favorable spin on the talks, telling reporters at a joint press conference in Baghdad this week that the two sides were close to a deal.
Negotiations were supposed to have been wrapped up in July.
Timeline for withdrawal
With the clock ticking, the thorniest issues — legal jurisdiction over U.S. troops and contractors and a timeline for a U.S. withdrawal — remain unresolved.
The Iraqis insist on the right to try American troops accused of crimes — at least when alleged offenses are committed off U.S. bases. The Iraqis want the last American soldiers to leave Iraq by the end of 2011 unless the Baghdad government asks them to stay.
U.S. negotiators want the withdrawal tied to the security situation rather than dates. Both sides describe their positions as "red lines."
"The Americans show no interest in committing themselves to any deadline or timetable and they think that such process depends on the situation on the ground," Kurdish lawmaker Mahmoud Othman said.
Privately, Pentagon officials closely involved in the talks say they are not optimistic that a final deal will be clinched anytime soon. A top U.S. official said there is even less reason for optimism now than in recent months.
The officials spoke on condition of anonymity to characterize the closed-door talks.
Economy on Americans' minds
Iraqi officials familiar with the talks are no less pessimistic.
"Negotiations are focusing on a very hard stage," al-Maliki aide Sami al-Askari told The Associated Press. "I think it will be rejected by parliament as it stands now."
Another senior al-Maliki aide said the Iraqis had expected more flexibility from the Americans. He did not elaborate and spoke on condition of anonymity because of the sensitivity of the issue.
The Iraqis may have miscalculated, believing the Bush administration was under pressure to wrap up a deal quickly with the Iraq war and the performance of Iraq's U.S.-backed government looming as major issues in the U.S. presidential contest.
With the Nov. 4 balloting less than a month away, however, the global financial meltdown has eclipsed the Iraq war in the minds of American voters. The growing conflict in Afghanistan dominates the public debate over the war on terror as violence in Iraq recedes.
As pressure on Bush eases, it has increased on al-Maliki, both for and against the agreement.
Arab states in the Persian Gulf have urged him privately to accept the deal as a counterweight to Iran, according to Iraqi officials who spoke on condition of anonymity because they were not supposed to talk about diplomatic contacts.
At the same time, however, Iran has stepped up its public campaign against the agreement. President Mahmoud Ahmedinejad told a visiting Iraqi official Tuesday that the Iraqi government and people had a "duty" to resist the Americans. Iran's parliament speaker Ali Larijani warned of "unpleasant impacts" if the Iraqis accept the deal.
The Iranians have influence among Iraqi Shiite parties whose support al-Maliki needs. U.S. officials also worry that Iran could step up support for Shiite militants still capable of launching attacks in Baghdad and elsewhere.
In an interview last week with The Associated Press, al-Maliki spoke of pressure "from east and west and north and south" but said he was "determined to rise above all these difficulties and pressures because we want this agreement to be passed."
But Iraqi politicians close to the prime minister say he risks a political crisis if he does not maneuver carefully. He must convince Sunni, Shiite and Kurdish parties that he has held out for the best terms possible and ensure their support when he submits the draft to parliament.
To do that, al-Maliki plans to present a final draft to leaders of the political parties in parliament and ask for their support in writing before the parliamentary debate, according to two officials close to the prime minister.
That will make it difficult for the parties to take one position in private and another in public.
Shiite support needed
Al-Maliki can probably count on support of the Kurdish alliance and the major Sunni bloc.
But al-Maliki needs strong support among his fellow Shiites to avoid threatening his political base in advance of the January provincial elections and national balloting later next year.
Followers of anti-American Shiite cleric Muqtada al-Sadr, who control 30 of the 275 parliament seats, have announced they will oppose the deal. Al-Maliki's Dawa party, with 25 votes, will likely support him.
That leaves al-Maliki's major Shiite ally, the Supreme Iraqi Islamic Council, which holds another 30 seats. The council is close to Iran but also works with the Americans.
Party officials said they are waiting for the talks to finish before taking a stand.
But the council faces a strong challenge from al-Sadr's followers in the provincial elections. Party officials say they must measure public support in the Shiite south before committing to the deal.
The council is also close to the major Shiite cleric, Grand Ayatollah Ali al-Sistani, whose public endorsement would be critical for the party members to support the deal.
At the State Department on Wednesday, spokesman Sean McCormack said the fact that the talks have dragged on for so long indicated how seriously both sides take the issues.
"We want it done as soon as possible," McCormack said. "There's certain rhythm to these things and it will take as long as it needs to. Everybody understands that there is a time by which they need to be completed."
Neither side has signaled what it would do if the year ends without an agreement.