By Gordon Corera
BBC security correspondent
This week's talks to try and draw up a new constitution represent a crucial stage in US efforts to end insurgency and to bring the troops back home.
The US needs political progress before it can pullout soldiers
But this would depend on two things. Firstly, building up the capability of the Iraqi forces so they can stand alone.
Secondly, creating a political process which draws in groups who have supported the insurgency.
Although the US military admits that in the short term Iraq could be the scene of more violence.
Major General Douglas Lute - Director of Operations for US Central Command which covers Iraq - told the BBC that in the short term the violence could get worse before it gets better as insurgents try and disrupt the ongoing political process.
"What we should expect before these major milestones coming up - first of all the passing of the constitution referendum which we anticipate mid-October followed by the national elections again in December - is a sharp spike in insurgent activity.
"The insurgents quite frankly can't tolerate the passing of a national constitution and they cannot tolerate a second successful round of elections in December and you can be sure they will fight."
15 August deadline extended twice
National referendum on constitution by mid-October
Full government elections by mid-December
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But the US believes that if it can move the political process forward at the same time as building up Iraqi security forces, the potential to withdraw American (and also therefore British) troops is real.
"If those two paths remain on track by spring or summer next year there'll be room for adapting forces structure on ground," argues Gen Lute.
"We want to undercut that notion of occupying force," he said, recognising the argument that a less prominent US role could help stabilise the country.
However, he also warns that the transition between US control of operations and Iraqi Security Force control could be a difficult moment and is already causing some problems in towns along the Euphrates River Valley.
The plan is for Iraqi Security Forces to work closely alongside US or British battalions to gain experience.
Ten man transition teams are also being embedded within Iraqi formations to help the US keep an eye on progress and also ensure operational contacts in areas like calling in close air support.
Iraqi politicians have missed several deadlines for agreeing the constitution
But there is still though more work to be done.
"We've been very successful in is creating building blocks for Iraqi forces - what we haven't yet done is stand these bricks into meaningful construct running from the top of chain of command all the way down," concedes Gen Lute.
Figures from the Brookings Institution in Washington show an insurgency that is far from exhausted.
For the last three months in a row, there have been an average of 70 attacks a day - the highest sustained level of insurgency since the war ended.
There have been peaks and troughs in the violence and the number of US casualties.
There were peaks in April and November 2004 associated with assaults in Falluja but there was then a slowdown after the January 2005 elections.
This led to some optimism that a corner may have been turned. But in the last four months, American fatalities have mounted - with this month proving particularly deadly.
However, 14 of Iraq's 18 provinces are essentially peaceful with fewer than one attack a day.
But it's the areas with large Sunni populations which look most problematic politically and militarily.
Despite all the attention focused on Abu Musab al-Zarqawi and foreign fighters, CENTCOM estimates that 90% of the insurgency is Iraqi and Sunni.
The history books show that insurgencies are almost always defeated by a combination of military and political strategies and the hope will be to draw into politics and away from violence those providing active or passive support to the Sunni aspect of the insurgency.
Those in contact with the Sunni insurgents also see a critical point coming up politically.
After sitting out the January elections, rejectionist Sunni's are being encouraged to register to vote in the upcoming referendum on the Iraqi constitution which is supposed to take place in October.
There is also an emerging loose anti-constitution alliance bringing together Sunnis with the supporters of radical Shia cleric Moqtada Sadr who has strong support around Baghdad as well as the South.
If these opponents of the US presence and current Iraqi government can get two thirds of the population to vote no to the constitution in at least 3 of Iraq's provinces then the constitution - and the entire political process of most of the last year - would fall.
However, for the US military, a successful referendum and political process could signal the beginning of the end for the insurgency.
"Ultimately this insurgency draws its fuel from the political process, and if the political process is seen to be moving forward it will be undercut," argues Major General Lute, "And that's exactly why the insurgents and the terrorist who are associated with them will contest it down to the last man."