Fully seven months after the March 7 parliamentary election in Iraq, there’s the first glimmer of a chance that an Iraqi government coalition might be within reach. Whether or not it happens, and what it looks like, has a lot to do with future American influence in Iraq. And it will be the result of an ugly, behind-the-scenes power struggle between the United States and Iran over which country will be the dominant power in Iraq.

It’s complicated. Try to follow along.

The March 7 election resulted in a sharp division of Iraqi politics along ethnic and sectarian lines. A mostly secular party called Iraqiya, led by secular Shiite Iyad Allawi and supported by nearly all of Iraq’s Arab Sunni voters, won ninety-one seats in the 325-member parliament. Prime Minister Maliki’s State of Law coalition, which drew votes almost entirely from Shiites, won eighty-nine seats. A coalition of religious Shiites, cobbled together from fractious Shiite parties with Iran’s support, won seventy seats, most of which came from the party led by Muqtada al-Sadr, an anti-American cleric who lives in Iran. And the separatist Kurds, who are themselves fragmented, won fifty-seven seats. Because the next prime minister would need 163 seats to succeed—and, in practice, quite a few more than that to maintain a stable government—some sort of grand bargain is necessary.

Last week, Muqtada al-Sadr agreed to support Maliki’s return as prime minister. That set off alarm bells in Washington, because Sadr is unalterably opposed to the US occupation of Iraq and he’d likely oppose any extension of the American presence beyond 2011, when the last of the remaining 50,000 American troops are scheduled to leave. Though Sadr has nationalist tendencies, in recent years he’s drawn increasingly closer to Tehran, and a big role for Sadr in the next Iraqi government drew a strong reaction in Washignton because it would mean that Iran, not the United States, was emerging as the most powerful player in Iraq. Ken Pollack, a former CIA officer and Middle East analyst at the Brookings Institution, told the Washington Post

"The Sadrists having a key role in the next government of Iraq [is] one of the few redlines that the Obama administration had. This is something that Iran has been trying to do for months. Clearly this is a big win for Iran and really bad for us."

And Dan Serwer of the US Institute of Peace told the New York Times:

"An Iraqi government that owes its existence to the Sadrists and lacks the strong support of Allawi would necessarily be one that leans in Tehran’s direction."

But note the qualifier about "the strong support of Allawi." Indeed, Allawi is not out of the picture, not by a long shot. Lately, there are reliable reports that Allawi and Maliki are talking about some sort of grand coalition, one that would still marry the newly formed Maliki-Sadr alliance to Allawi’s bloc. It isn’t a done deal, and lots could go wrong.

Until now, Allawi has declared forcefully that he’d never support a government led by Maliki. But according to the terms of the purported deal, Allawi would become president of Iraq, and Maliki’s position as prime minister would be greatly weakened. Indeed, according to various reports, President Allawi would have power over foreign affairs, defense, oil and energy, i.e., pretty much everything that’s important. Reportedly, the deal between Maliki and Allawi was brokered by none other than Sadr, who’s been in regular contact with Allawi for a long time.

The United States has strongly supported the inclusion of Allawi in the next government, and so have Saudi Arabia, Egypt, the Arab Gulf countries and Turkey. All of them see Allawi as more representative of the Sunni Arabs of Iraq, and therefore more likely to resist Iran’s vast and growing power inside Iraq. But, in a bad sign for the United States, the Maliki-Allawi-Sadr deal seems to have been assembled not in Washington, but—yes—in Tehran. Recently, Allawi met with Syria’s President Assad, and by some accounts asked Assad to work with Iran on a deal. Assad, a close ally of Iran’s, visited Tehran over the weekend, where he met with Ayatollah Khamenei and President Ahmadinejad. The reports of the Allawi-Maliki deal surfaced soon after Assad’s talks in Tehran.

The United States, of course, isn’t sitting on the sidelines. Vice President Biden, who has the Iraq portfolio for the Obama administration, has been on the phone with every Iraqi leader who’ll talk to him, but it’s quite certain that list doesn’t include the Sadrists, who put together the deal with Iran’s backing.

PressTV, the Iranian outlet, carried an interview with Hassan Danaie-Far, Iran’s ambassador in Baghdad, who praised the Sadr-Maliki politicking. "The development is a turning point for exiting the deadlock over the formation of Iraq’s government," he said. And, in an interview with the Wall Street Journal, Danaie-Far smugly noted: "We have connections and ties to all political groups in Iraq."

If Maliki and Allawi do strike a deal, along with Sadr, the United States will no doubt try to put a lipstick on it, noting that all along Washington has wanted a broad coalition government in Iraq that involves all factions. (The Kurds, who fancied themselves kingmakers, will have little choice but to go along with the government coalition as it takes shape.) But the reality is that as US forces drawdown next year, the influence of Iran will continue to grow. Eventually, of course, Iraq will reassert its nationalism. Only last week, the Iraqi oil minister announced that Iraq has vastly more oil than previously reported, a total of 143 billion barrels of reserves, surpassing Iran as the world’s second-largest reservoir of oil after Saudi Arabia. Iraq, too, will have access to Western, Russian and Chinese investment and technology, while Iran is ever more isolated and its oil and gas industry falls into stagnation. But for now, through sheer geopolitical influence, Iran is the big dog in Iraqi politics.