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By Andrew North
Baghdad correspondent, BBC News
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Baghdad, the capital of Iraq, is the most deadly place in the country
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"There were six heads in our street this morning."
So said one of my Iraqi colleagues as he arrived in the office recently.
Almost anywhere else, it would have been shocking news - a story in its own right.
But here the shock was short-lived. Each atrocity in Baghdad is now quickly superseded by another.
Nearly four years on from the US and British invasion and its mishandled aftermath, Iraq is a place where such violence has become mundane.
The elected government - held up by George W Bush and Tony Blair as evidence the invasion was worth it - is seen by many Iraqis as part of the problem, with some of its own forces actively involved in the sectarian bloodshed now tearing the country apart.
Reporting from here over the past year, the sensation has been of a nightmare closing in - especially in Baghdad and the surrounding region.
Fractured city
It is not just the constant explosions and gunfire. There is evidence the violence is now infecting every aspect of life.
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KEY DEVELOPMENTS DURING 2006
The UN says at least 25,000 Iraqis died violently. The true figure may be much higher
More than 800 US troops killed
Violence at record levels, with 140 reported attacks daily
Thousands of Iraqis leaving the country each week
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Shopkeepers are limiting their opening hours, for fear they will be kidnapped or bombed.
People stay at home for days at a time, too frightened to leave. Parents stop their children going to school. If they go, they find playgrounds divided by Shia and Sunni gangs.
Each time they go to work, my brave Iraqi colleagues take their life in their hands.
They must pick their way through an ever more fractured city, making complex detours to avoid certain areas, or be ready to deal with checkpoints where the true loyalty of the gunmen running them may not be clear until it is too late.
Handover of security from US forces to Iraqis is not straightforward
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Prospects of things improving in 2007 look bleak.
There are no obvious answers anymore, in a situation where each new atrocity provokes the next and trust has broken down.
The execution of Saddam Hussein this weekend has done nothing to change that.
For most Iraqis, from government ministers to ordinary people caught in this maelstrom, survival is the priority now.
Iraqi control
Iraqi Prime Minister Nouri Maliki has long insisted on the Americans and British giving him more control over security.
The Iraqis are now in charge in three provinces and such handovers are likely to speed up in the new year.
US and Iraqi operations to bring security to Baghdad have failed
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But to a certain extent, this is window dressing.
The Americans are still reluctant to hand over the reins of Iraqi units under their control, fearful they may end up being used for sectarian aims, for instance to clear more neighbourhoods of Sunnis.
There is little sign of Mr Maliki fulfilling his commitments to crack down on militias such as Moqtada Sadr's Mehdi army which are blamed for much of the sectarian bloodshed.
Just as important, something has to done about the police - which has been widely infiltrated by the Mehdi army and other militias.
They would rather forget it now, but US commanders promised a big push to sort out the police in 2006, calling it The Year of the Police.
It was, but for all the wrong reasons.
Lethal mistakes
From Baghdad to Basra, many police units have become known not for solving crimes but committing them - including carrying out a wave of sectarian abductions.
The loyalty of Iraq's police forces has been questioned
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Much has been made of the US decision to disband the Iraqi Army in 2003, a move that ended up turning thousands of soldiers and officers into insurgents.
The way Iraq's US and British occupiers set up the new police force is proving almost as lethal a mistake.
Desperate to get things going, thousands of recruits were rushed through training. Little attention was paid to who was getting in and how they were being chosen.
The Christmas Day assault by British forces to "cull" a Basra police unit which they had themselves set up was just the latest demonstration of this disaster.
All eyes will be on President Bush later this month when he announces yet another "new" Iraq strategy.
Waning power
The message of the past year has been that US power here is waning.
Two big operations to reduce violence in Baghdad failed dismally.
Shia cleric Moqtada al-Sadr wields power from behind the scenes
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Mr Bush says he may send in a "surge" force of at least 20,000 more troops, specifically to secure the capital.
But numbers like that give a distorted impression. In practice, it will probably mean only 3,000 to 4,000 extra soldiers on the streets.
For every frontline soldier, there are six to seven in the rear, organising food, ammunition and other support.
Senior commanders also are sceptical of what more troops can achieve.
The outgoing number two officer in Iraq recently said he doubted the military could do any more.
The answer, Lt Gen Peter Chiarelli argued, was to create more jobs: "To put angry young and middle-aged men to work."
With more Iraqis and Americans killed this year than in any other since 2003, George W Bush and Tony Blair's decision to invade is more controversial than ever.
But so too, many believe, is the one thing both men say still justifies the whole venture - democracy. Or at least the way in which it has been brought to Iraq. Similar doubts apply to Afghanistan.
New governments have been elected, new constitutions drawn up - under US and British eyes - but they have proved increasingly irrelevant.
"I used to think democracy came first," one Iraqi told me. "I've learnt that's not true - it's security."
More and more Iraqis are not staying around to find out if this US and British experiment is going to work.
As a friend told me recently, "Every conversation I have now starts with talk about the best way to get out."