With most American troops gone, Iraqis believe they can handle any military and police combat themselves. But where they still need the U.S. is for intelligence collection and analysis. A lot of this gear and data is being turned over to the Iraqis. This is because a lot of the equipment is available to any government or police force, and the data (fingerprints, iris scans, DNA samples) is what the Iraqis could have collected themselves. A lot of was originally obtained by digitizing Saddam era fingerprint records. But there are some items (special search and analysis software, lists of people who worked for the U.S. or informed on Iraqi groups) being held back, for obvious reasons. The corruption in Iraq, and the Iraqi government, is such that you cannot expect the Iraqis to keep secrets. Iraqi police can catch terrorists and put them out of business, but the endemic corruption makes it difficult to find, arrest and keep imprisoned those who can afford to bribe or threaten their way out. Another problem with Iraqis is bureaucracy. They have too much of it, and not enough cooperation. So that while American intelligence organizations get the needed information down to the troops, with the Iraqis, this often does not happen. The key data gets stuck somewhere because some bureaucrat does not want to let go (because the bribe is not high enough or there's a personal or organizational feud going on.)
U.S. commanders believe the Iraqi security forces are competent enough to keep it all together, but will have to deal with their bureaucracy and corruption issues before they could eliminate the terrorists and major gangs. The more competent Iraqi commanders (who tend to be the target of terrorists and gangster assassination efforts) are consistently successful at finding and eliminating terrorist cells.
Most of the 50,000 U.S. troops remaining in Iraq are armed and trained to fight, even though their primary jobs now are training, security or some kind of support. Peak American strength in Iraq was 176,000 troops. The U.S. State Department is now in charge of American operations in Iraq, and to assist that, they are doubling their security force (which always used private contractors, not troops) to 7,000. Most of these private contractors are former military or police.
In another quirk of Iraqi culture, the majority of Iraqis, despite grumbling for years about "American occupation" are unhappy that most of the U.S. troops are gone, and that all will be gone by 2012. Iraqis complain about their inability to govern themselves effectively, but won't do what has to be done (negotiate and compromise) to fix it. Meanwhile, the Kurds have signed deals with German firms to develop natural gas deposits in the north, and daring the Iraqi Arabs to do anything about it. The Kurds are quite open about telling the Iraqi government that the national oil company is too corrupt (in general and compared to the less corrupt Kurds) to handle the gas fields project.
The corruption has made it difficult to incorporate the semi-autonomous Kurdish north into "greater Iraq." The Kurds don't trust the Arabs, especially the Iraqi Arabs. The Kurds have been very good at keeping Arab terrorists out of their territory, and look the other way as Turkish and Iranian forces cross the border in pursuit of Kurdish radicals (Turkish PKK and Iranian PJAK) using northern Iraq for bases. This is politically more acceptable than trying to drive these groups out of Kurdish controlled Iraq.
There is increasing public unrest over the incompetent government. Electricity shortages in general are a cause of violent demonstrations. But the general incompetence and corruption is driving more and more Iraqis to angry group actions. The anger is driven, in part at frustration of elected officials still deadlocked, after six months, in trying to form a new government. The politicians will not compromise, and thus will not rule. They will take their pay and whatever bribes come their way, but they will not do what they were elected to do.
August 27, 2010: Al Qaeda used more than a dozen car bombs to attack police and police installations. Nearly 60 people were killed. These attacks were a challenge to, and embarrassment of, the security forces. The terrorists exploit the incompetence of some police commanders, and the willingness of many others to take bribes, or submit to terrorist threats. For the first six months of this year, about 300 people a month died from terrorist violence. But in the last two months, the terrorists have tried to double that, to show that, with the Americans gone, the Shia dominated Iraqi government will not be able to maintain order. About 500 died in July, and it may be more for August. Actually, the government can maintain order. Most of the country is at peace and prospering, but the pervasive corruption makes it difficult to eliminate well financed and disciplined criminal organizations (like al Qaeda, and several purely criminal gangs).
August 19, 2010: The last American regular (as opposed to "advise and assist") combat brigade left the country, and moved into Kuwait.
August 17, 2010: An al Qaeda suicide bomber attacked an army recruiting center, killing 61.