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There's really only one possible exit strategy. Get UN forces in and reduce American interference. Begin a serious political reorganizing of Iraq- organize representative democracy to at least a regional level, train police forces and militias, start turning some oil revenue over to Iraqi agencies and governmental organizations without too many questions asked. Covertly negotiate with the different guerrilla groups for armistices in different locales in return for local autonomy and UN policing/Iraqi militias. Rebuild very basic infrastructure, set up some First World level infrastructure in the main cities.
The hardest part is how to arrange Iraq at a national level. I'm inclined to believe a constitutional confederacy bound together by guarantees of sharing of oil revenues according to population as the most realistic option. The constitution of which is designed in advance to be amended to form a proper rule of law state and federation once these conditions become warranted/necessary/appropriate.
The most controversial parts will be what to do with the residual Ba'athist powers, Hussein proper, criminal prosecution, and foreign affairs. Basically the Ba'athists have to be bought off and coerced to some degree, UN weapons inspections and regulations have to be permitted for some very long period of time, an armistice with Israel declared (only to stop Mossad and others from targetting the country for havoc in its most fragile state), all dealings with 'agents of foreign governments' (Iranian, Turkish, Israeli, Syrian, Halliburton) must be made illegal if not with consent of the national Iraqi government, and all 'members of terrorist organizations' get 90 days to leave the country. There has to be a guarantee of earnest effort and willingness to make reparations to achieve peace treaties with Iran, Kuweit, and Saudi Arabia.
Lastly, Saddam Hussein...I would personally offer a conditional pardon and amnesty, with a guarantee of one 'palace' and a pension (if he has none of his own), in return for some obvious concessions. Perhaps the supplied place of residence would be in another country and he could make the occasional covert visit. In return he would have to supply a Truth Commission all available documentation and complete answers to any and all questions about his reign.
Anyway, that seems to me the best we can do with the country. That would be "victory"- one dictator removed from power, one Third World country given its freedom and material possibility to create what good it can unimpeded. There will be simpler schemes/designs which do less for Iraq and probably more for e.g. Halliburton or Turkey, or ignore the demands of reality or Iraq's condition or its historical patterns.
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