US: The White House said yesterday that the drive for democracy in Iraq will not be deterred by the assassination of Izzedin Salim, the head of the US-appointed Iraqi Governing Council.
The assassination of Mr Salim drove down stock prices in the US, European and Asian markets and pushed oil prices to a new record high.
Already reeling from the prison abuse scandal, the US administration faces a major setback in its struggle to create a caretaker Iraqi government by July 1st, with elections by the end of January next year.
Pressure is mounting in the US to bring the troops home and an alliance of 39 groups is preparing to hold street rallies calling for the withdrawal of US troops under the banner "Win Without War".
At the same time the Pentagon announced yesterday that 3,600 of its 37,000 troops in South Korea would be transferred to Iraq during the next troop rotation mid summer, to replace units overdue to return home.
US Secretary of State, Mr Colin Powell, fuelled speculation that the Bush administration wants an exit strategy in place before the November presidential election when he said on Friday that the caretaker government would have the right to order American and coalition troops out of the country. He added, however, that it was extremely unlikely a caretaker government would ask US forces to leave on July 1st as the new Iraqi security forces would be unable to secure the country.
At the UN the Bush administration is facing a barrage of questions from coalition partners as it seeks a new Security Council resolution on the powers of a post-occupation caretaker government in Iraq.
Diplomats from the 15-member Security Council want to know if Iraqis will have control of Iraqi police and army units, if they will be integrated into a US-commanded multi-national force, or if they will be able to refuse to support US-led operations.
"This cuts to the whole issue of sovereignty," said one European diplomat. "If you have a sovereign Iraqi government it has to have some control of security."
A key issue is control of Abu Ghraib prison, where hundreds of Iraqis are interned, and other detention centres. Some UN diplomats believe that after the abuse scandal, the US will hand them over to the Iraqis.
However, the US holds 100 "high value" Iraqi detainees, including former Saddam Hussein aide Tariq Aziz, at a solitary confinement area at Baghdad airport and is unlikely to hand them over to a caretaker Iraqi government.
The US administrator in Iraq, Mr Paul Bremer, has said an order exempting US forces from Iraqi law would remain in force after June 30th, but diplomats say this could be challenged in international law, as the occupation will be officially over.
American and British officials have been holding "informal informals" at the UN, i.e. working sessions to draft a resolution on Iraq that could get the approval of the 15-member council. The most recent took place last week.
The Russians and the French are taking the lead in arguing that the transfer of sovereignty must be real and substantial.
The draft of a new Security Council resolution is awaiting the report of UN special envoy, Mr Lakdar Brahimi, on his efforts to form an interim government.
Diplomatic sources at the UN said one of the most difficult issues would be the authority and length of deployment of a multi-national force.