The country faces two rebellions. The Sunni Arab terrorists are still active. Although the number of Sunni Arab terror attacks continues to decline (from 42 attacks a week in June, to about 29 a week now), the Sunni Arab strategy has shifted. Now the Sunni Arab terrorists appear to be trying to anger the Shia Arab majority to the point where retaliatory attacks on Sunni Arabs will begin again. This strategy never made any sense, because many Shia (and Kurds as well) want to kill all Sunni Arabs or, simply drive them out of the country (into Jordan, Syria, Kuwait and Saudi Arabia.) But the Sunni Arab terrorists have this fervent belief that, if the Shia majority comes after them again, the Sunni world will rise up to save them. It's very unlikely that this would happen, it's not the way things work in this part of the world. But many radical groups, especially in the Middle East, have a hard time separating the fact they live, from the fantasy they desire.
The U.S. military wanted to continue their counter-terror operations in Mosul, but the Iraqi government refused to give an exemption (to the June withdrawal of U.S. forces from Iraqi cities) for that. This offer was turned down mainly because the Iraqi government had convinced itself (because it was the politically popular thing to do) that their security forces, and security situation, were in better shape than the facts would warrant. In reality, Sunni Arab terrorist groups continue to survive in parts of northern Iraq (in and around Mosul) that the government has yet to gain complete control of. This is where the American military wanted to continue operations, to stamp out the last area supporting the Sunni Arab terror groups. Long term, the government security forces will eventually clear the area of terrorists. But short term, the attacks on Mosul and Baghdad will keep coming.
Longer term, the Kurds are a more dangerous problem. The Kurds want Kirkuk, a traditionally Kurdish city (and its oil fields) that is just across the current border separating the Kurdish controlled (since the early 1990s) north, and the rest of Iraq. The parliament has still not passed a law specifying how the oil revenue will be split up. Each ethnic and religious group wants to be guaranteed their share. For the last four decades, the Sunni Arabs (about 20 percent of Iraqis then, down to 15 percent now) took most of the oil money for themselves. This has not been forgotten. But there is much enthusiasm in the Shia Arab community to keep nearly all of the oil revenue for the Shia, and screw the other minorities (Kurds and Sunni Arabs). The Greed Gambit means lots of fighting and dead bodies. Much of the current Sunni Arab violence, and the potential war with the Kurds, is largely driven by the unresolved division of oil revenues. As long as this issue remains unresolved, Iraq still has the potential for another few years of civil strife.