As Americans cast their hopes and fears into the wishing-well of the U.S. presidential election, the United States is squandering the best chance it may ever get to withdraw its military and civilian occupation forces from Iraq on relatively favorable terms.

In 1991, President George Bush Senior avoided the trap of a land invasion of Iraq. One of his senior advisers told him that sooner or later the Iraqis would insist on holding elections, which "our guys will lose." Twelve years later, Bush II and Cheney launched their desperate effort to reverse the nationalization of the global oil industry and to establish the aggressive and illegal use of U.S. military power as a dominant force in the 21st century. Whether you view this as a risky decision or a serious war crime depends on the relative value you attach to American wealth and human life.

But the Iraqis did insist on holding elections and our guys did lose, as predicted, in 2005. Our guys were Anglo-Iraqi interim Prime Minister Iyad Allawi, Iraqi-American Interior Minister Falah Naqib, and a whole slate of Iraqi exiles who had been part of the CIA's program for regime change in Iraq throughout the 1990s. Allawi is back in London, certainly richer, possibly wiser, and with a few good stories to tell over a glass of Scotch. "Did I tell you I was the prime minister of Iraq?" It seems that the real meaning of "security" for "Saddam without the mustache" was his day-job as an eye-doctor in Britain's National Health Service.

Naqib was the son of the chief of staff of the Iraqi Army who defected to the United States in the 1970s. The younger Naqib was appointed interim interior minister of Iraq in 2004. Steven Casteel, the former chief of intelligence of the US Drug Enforcement Administration, who had run the interior ministry for the Coalition Provisional Authority, stayed on as Naqib's senior US adviser. Naqib and Casteel recruited, trained and deployed the Special Police death squads who detained, tortured and executed thousands of Iraqis in a reign of terror and ethnic cleansing in Baghdad and other cities.

The Special Police recruited by Naqib and Casteel (later re-branded as the National Police) have continued their grisly work throughout the occupation, while Western journalists have unquestioningly accepted the Pentagon's successive narratives of "stolen police uniforms," "sectarian violence" and "infiltration by Shiite militias" to explain away the carnage. And yet Naqib himself admitted to the New York Times, after the public disclosure of the al-Jadiriyah interrogation center in November 2005, that "the majority of commando officers working in the ministry now were appointed by him," although his Badr Brigade successor, Bayan al-Jabr, with Casteel still at his elbow, did add more of his own militiamen to their ranks.

The Special Police were trained by retired Colonel James Steele, an Iran-Contra figure who trained counter-insurgency forces that committed similar atrocities in Cambodia and El Salvador. He later became a vice president at Enron. After he left Iraq in April 2005, his trainees continued to work closely with American Special Police Transition Teams and with Americans stationed at the high-tech Special Police command center that they established and equipped in January 2005. The Special Police command center was part of the U.S. command and control network in Iraq, directly connected to CENTCOM in Baghdad and every U.S. forward operating base in the country. The notion that its massive campaign of arbitrary detention, torture and extra-judicial execution was somehow carried out without both active and passive support from US officials is an absurdity. The Americans involved must ultimately be held accountable for their crimes, just as surely as those who authorized torture and attacks on civilians by US forces and the "supreme international crime," the war itself.

But the two elections held in 2005 marginalized Allawi, Naqib and even our Islamist guy, Ibrahim al-Jaafari, the head of the London branch of the Dawa Party. Jaafari succeeded Allawi as transitional prime minister, but soon followed him home to London. Neither he nor Allawi were ever foolish enough to move their families or principal residences to the country they were pretending to rule. Jaafari told Tim Russert that Noam Chomsky was one of his favorite authors.

Instead of administering an Iraq run by our guys, the United States is now occupying a country in which the major players are all playing a more complex game than American occupation officials can control. For the umpteenth time in its history, the United States is finding that puppet-strings can be pulled from either end, and that this makes for an unpredictable puppet show with little relation to its own script. As Gabriel Kolko pointed out in Confronting the Third World in 1988, "The notion of an honest puppet is a contradiction that the United States has failed to resolve anywhere in the world since 1945."

Even as resistance forces continue to strike American targets in Iraq every day, the Iraqi government and national assembly are establishing credibility with their own people by standing up to their American puppet-masters over oil privatization and the status of forces negotiations. The United States is being forced to accept conditions for its presence in Iraq that serve the interests of the Iraqi government rather than its own commercial and strategic interests. Maliki and his colleagues know only too well what the Americans want, and they understand that they can use American desires for permanent bases and oil contracts as carrots to keep the Americans on their side, to help them consolidate their power in the country and to kill or intimidate their opponents.

A common understanding of torture survivors, in Iraq and elsewhere, is that they can stay alive by refusing to give their interrogators what they want. Tareq Sammaree, the former director of the School of Education at Baghdad University credits his survival at al-Jadiriyah to this understanding. He was sure that he would be killed as soon as his interrogators had got what they wanted from him, primarily the locations of other Iraqi academics who were hiding from the Special Police. This knowledge enabled him to endure horrific torture by US-trained interrogators. By the same token, Iraqi leaders understand that it is precisely their ability to withhold what the Americans want that gives them power over their puppet-masters.

The United States has been down this road so many times that it must be like a recurrent nightmare for State Department officials. In the 1940s, successive American envoys to the Chinese Nationalist government in Chungking reported that Chiang Kai-shek was running the most corrupt regime in history, but American aid continued to fill his coffers for want of a better option. The nightmare recurred with Syngman Rhee in South Korea, the Shah of Iran, Ferdinand Marcos in the Philippines, Mobutu in the Congo, Suharto in Indonesia, successive governments in South Vietnam, a long succession of dictators in Latin America and of course Saddam Hussein in Iraq.

Once an American puppet has grasped the power that he wields over his handlers, the United States is faced with a choice between following him down this well-worn garden path or engineering another regime change. The garden path usually wins out, as long as the carrots are kept dangling in front of the lumbering donkey's nose. The more that the US helps to eliminate its puppet's opponents and consolidate his power, the more problematic the prospects for a further regime change become.

In Iraq, the horrific violence of five years of military occupation in a country that quickly transitioned from conventional to guerilla war provided American officials with an albeit circular justification to maintain the occupation. Although the occupation itself was unquestionably the primary cause of violence, they argued that worse violence would be unleashed if it ended. The violence of the occupation provided its own justification. Now that the violence has diminished a little, because the work of the death squads and the destruction of cities in Anbar has been more or less completed, US officials argue that things are going better -- so now there is no reason for American forces to leave. This is a huge mistake.

Instead of seizing what is likely a fleeting opportunity to declare victory and get out, American policy-makers are greedily renewing their commitment to the original goals of the invasion. Western oil companies are finally taking tentative steps to begin operations, even without a legal basis, and negotiations continue for a status of forces agreement with the Maliki government. Despite congressional prohibitions on "permanent bases," they still want 58 of them, a compromise from the 200 they asked for when the negotiations began. A Pentagon lawyer admitted to the Senate Armed Services Committee in April that the Department of Defense has no legal definition for the term "permanent base." "It doesn't really mean anything," he said.

For the Iraqis, all of this can only serve to justify renewed resistance, possibly by the united front of Sadrists and Sunnis that the CIA warned against in November 2003, but which the US-backed death squads succeeded in undermining in the years that followed. Or a reconciliation between Maliki and other factions may lead to an official request for a US withdrawal, perhaps after the American election. And al-Sadr has withdrawn his party from provincial elections in order to maintain its status as an armed resistance group. Resistance to the occupation is still more important to him and his millions of followers than claiming the larger role in provincial government that they were bound to win at the polls.

Whatever happens on the Iraqi side, American leaders must understand that their original goals in Iraq are not and will never be achievable. As long as U.S. forces, officials and contractors remain in Iraq, they will always meet political opposition and armed resistance. They will never be welcome. How could they be after what they have done to these people and their country? The best chance for any sort of mutually beneficial or profitable relationship in the future lies in seizing this moment to begin a complete withdrawal of occupation forces from the country, including all U.S. troops, contractors and civilian officials. Once its sovereignty has been restored, Iraq will undoubtedly form close relationships with other countries in the region, China and Russia -- anybody but the United States. But mutual interests will eventually lead to at least a normalization of relations. Sincere apologies and substantial reparations will help this process more than anything the US can do from its present illegitimate position.

Senator Obama's campaign website declares, "He will keep some troops in Iraq to protect our embassy and diplomats." Under other circumstances, this might sound reasonable. But the new U.S. Embassy in Baghdad is not a legitimate embassy, and its thousand-plus staff are not diplomatic envoys to a sovereign country. The so-called embassy is a 104-acre fortified compound enclosing a corner of the four-square-mile Green Zone. It is 10 times the size of any legitimate embassy in the world. This is in fact the jewel in the crown of the network of American bases in Iraq, the headquarters of the US occupation, from which American advisers plan to maintain their influence over this and subsequent Iraqi governments.

The American occupation headquarters cost $736 million to build. Thousands of construction workers were lured, mostly from South Asia, by false promises of jobs in Dubai. Their plane tickets were taken away in Kuwait as they were loaded onto unmarked, aging chartered planes headed for Baghdad. Supervisors described workers being "treated like animals," beaten regularly and given dangerously inadequate healthcare that resulted in at least two deaths. Workers who escaped were rounded up and incarcerated, but 375 Pakistanis were finally sent home after they went on strike in June 2006.

The United States has also spent $5.6 billion on military construction at its other bases in Iraq and Afghanistan, plus an additional $1.8 billion now allocated for 2009. The embassy is the first of these bases that should be evacuated and handed back to Iraq, eliminating any pretext for Obama to leave behind a "residual force" that would continue the occupation on a smaller scale. The United States didn't pay a penny for the land in the first place -- it was a gift from Allawi's interim government. And State Department employees are only now moving into the new offices and apartment buildings, so it would be both practical and diplomatic to quietly abandon this folly now rather than later, along with the roughly 265 other US bases in Iraq.

A persistent feature of the "tragedy of American diplomacy," as William Appleman Williams called it, has been the hubris that has blinded American officials to opportunities like the one they are squandering in Iraq today. In Century of War in 1994, Kolko described the "institutional myopia" by which "options and decisions that are intrinsically dangerous and irrational become not merely plausible but the only form of reasoning about war and diplomacy that is possible in official circles."

In Washington, this institutional myopia has been compounded since the end of the Cold War by missed opportunities, delusional thinking and vested interests. The opportunity for nuclear disarmament and a more peaceful world has been squandered in favor of an unprecedented and unprovoked military build-up and the opportunistic use of U.S. military superiority to threaten and attack other countries. The tragic consequences of this historic failure have become much clearer during the eight years of the Bush-Cheney regime. And yet neither major candidate in this year's presidential election has presented a plan to finally retire the Cold War military-industrial complex before it wreaks even more havoc. Nor has either of them presented a new vision, however overdue, of a legitimate role that the United States could play in a peaceful post-Cold War world.