Parties, processions, a parade in the fortified Green Zone seat of government and embassies, and prime minister Nuri al-Malikii´s proclamation of June 30 National Sovereignty Day celebrated the US military´s handover of towns and cities to Iraqi security personnel on the way to a full withdrawal by the end of 2011.

But the day was also darkened by the deaths of four US soldiers from "combat-related injuries" in Baghdad and a bomb-vehicle explosion which killed at least 27 Iraqis in a Kirkuk market in the north.

The Iraq regime signaled its hopes for a new era by holding an auction Tuesday for eight oil and gas fields, Iraq´s first major opening to foreign investment since the energy industry was nationalized 40 years ago.

Yet DEBKAfile´s military sources stress that unresolved tensions among Shiites, Sunnis and Kurds still simmer and may erupt now that 130,000 US troops have withdrawn to 39 rural bases - nowhere near on hand for emergencies in the towns.

A small number remains in the cities to train and advise Iraqi forces, but Baghdad, Basra, Kirkuk and Mosul will be more vulnerable than ever and security in the small towns of Falluja, Ramadi and Baquba may also veer out of control under massive, multi-casualty bombing attacks.

Few really believe that the 650,000-strong Iraqi military is up to maintaining stability or dealing with a serious insurgency or wave of terror.

We are not leaving," the US commander in Iraq Gen. Ray Odierno assured Iraqis. "We´ll continue to be in support of Iraqi security forces to maintain stability throughout the country."

However, differences have begun to surface. The prime minister has attributed the pre-withdrawal spike in violence, which claimed more than 250 lives this month, to al Qaeda and remnants of the Iraqi Baath insurgents, whereas Gen. Odierno blamed Iran, which he said "is still supporting, funding and training surrogates who operate inside of Iraq. They have not stopped and I don´t think they will stop," he said.

On Monday, US ambassador Christopher Hill said he was concerned that illegal arms continue to flow into Iraq from Iran.

DEBKAfile´s sources point out that US president Barack Obama´s pledge on attaining office to withdraw US soldiers from Iraqi cities by June 30 - on the road to ending an unpopular war which has claimed the lives of 4,321 US soldiers and tens of thousands of Iraqis - has no military justification.

Iraqi cities, especially Baghdad, have been left wide open to an upsurge of violence expected in the coming weeks. And the situation in the Maliki government is so fluid that a local Iraqi officer, in Mosul, say, might hypothetically seek US military assistance in a crisis and meet a refusal from central government in Baghdad. The decision would then devolve on the American command. (Copyright 2000- 2009 DEBKAfile. 06/30/09)