The war is still being fought in Mosul. Here, Kurds and Sunni Arabs confront each other over who will control the region. Saddam Hussein sent hundreds of thousands of Sunni Arabs north and settled them on Kurd land, and in Kurd houses. The Kurds were forced further north, and now, a generation later, they are back. The Sunni Arabs don't want to move south, to poverty and loss of face. This provides plenty of desperate Sunni Arabs who are willing to support al Qaeda, other Sunni Arab extremists, and criminal gangs, in fighting the Kurds and the Shia Arab dominated central government. The terrorists, and many criminal gangs, still have access to Syria (as a refuge, base and staging area). The Syrian border isn't as easy to cross, for the bad guys, as it used to be. But the border is not sealed, and if you are patient and careful, you can avoid the patrols and sneak across. But there's no more large scale crossings. Mostly now it's small groups of men and goods. The terrorists up north are short on weapons, but not cash. That still comes across, and it helps keeps the terrorism going. The foreign volunteers, who are often used as suicide bombers, still come, but in much smaller numbers. The terrorists will never be completely gone from this area as long as the Kurds and Arabs are still deadlocked on who shall control what.
The terrorist groups are taking heavy losses, because of the larger, and more competent Iraqi police force. The U.S. forces also have a formidable intelligence system, which uses years of data collected on Iraqi terrorists and criminals, as well as powerful surveillance capabilities, that feed a steady flow of tips to the U.S. and Iraqi troops out making arrests and confiscating weapons. The Iraqis want to hold on to American intel capabilities, and that is one of the reasons some U.S. troops will be in Iraq for a few more years, to assist in going after the remaining terrorist groups, and the major criminal gangs. Some of these intelligence and surveillance systems can be turned over to the Iraqis, but some of the intel data is too highly classified to share, and some of the technology falls into the same category.
The government is also cracking down on corrupt police, especially the death squads. Last week, a dozen Shia Arab policemen were arrested for murdering Sunni Arabs. These killings were carried out while the cops were in uniform, often in the daytime, while they were on duty. There were witnesses willing to testify. Up north, there are problems with corrupt Sunni Arab police. This results in leaked information, and at least two attacks on U.S. soldiers (by Iraqi police in uniform).
The U.S. has announced its plan to withdraw most American forces from Iraq. This will take place over the next 18 months, with the current 143,000 troops being reduced to 50,000. At that point, American troops would no longer participate in combat on a regular basis. The U.S. has an agreement with Iraq that calls for all U.S. troops to be gone in three years, if both nations agree. But there are many Iraqis who want some U.S. troops to remain, to help guarantee the survival of a democratic government ("coup insurance") and protection from Iran and Turkey.
February 25, 2009: After a two year investigation, the government has identified Sunni Arab member of parliament Mohammed al Daini as the one who organized a suicide bombing inside parliament two years ago. Parliament has lifted al Daini's parliamentary immunity, and police are searching for him. Several Sunni Arab politicians have been accused, or caught, using violence against rivals, or the government in general. Al Daini was found guilty, in absentia, for his involvement in terrorist activities. Al Daini is believed to have fled the country.