At 10.45 this morning Baghdad local time, in a hasty ceremony held behind locked doors, the American proconsul Paul Bremer handed over power to an interim government composed of Iraqis. Until this moment, June 30th had long been put forward as the unchangeable and non-negotiable date when the future of Iraq would be decided. Now the whole thing was rushed through with indecent haste, two days early.

The formal handover of power is normally accompanied by pomp and ceremony, the beating of drums and the sounding of trumpets, the raising and lowering of flags. Here, there was nothing of the sort. The small meeting of men in suits and others in Arab dress, was all over in the blinking of an eye. More than the representative of an imperial power handing over power to a grateful ally, Paul Bremer resembled a man who had burned his fingers hastily tossing the hot potato to another.

The new prime minister placed his hand on the Koran and swore to uphold the freedom of Iraq. Mr. Bremer was whisked away in an American transport plane, no doubt happy to get away with his life. The official representative of American imperialism sneaked out like a thief in the night. However, notwithstanding Mr. Bremer’s understandable feelings of relief, the so-called transfer of sovereignty is a farce. The US army remains the power behind the throne. The claim that the Americans and Iraqis are “partners” is a deception. It is a partnership of the donkey and its rider.

Despite all the noisy propaganda about democracy, the new government has not been elected. It has effectively been nominated by the occupying forces and hand picked for their loyalty to Washington. Iyad Allawi, the prime minister-designate, is a stooge of the CIA. Ironically, he is a former supporter of Saddam Hussein and a Baathist leader, who only decided that it was the right time to oppose Saddam Hussein in the 1990s.

The question is how much power will the Iraqis really have? State power in the last analysis is armed bodies of men. The army and police will theoretically be controlled by the Iraqi government, but in practice the Coalition will decide. The US army will remain on Iraqi soil, making a complete nonsense of the claim that the occupation is at an end.

Allawi and his government depend for their very lives upon the presence of a 150,000-strong multinational force, of whom all but around 17,000 are Americans, backed by thousands of western and Asian mercenaries under America's wing and beyond the reach of Iraqi law. In theory the occupying armies would withdraw if the new government requested it. But this argument overlooks the little detail that the new government is entirely dependent for security on these same forces. Unless they are very tired of life, they will not make such a request.

The new government will also be completely dependent on American money. This is the case with Allawi’s armed forces. In the 2004 budget, all but $300m of the $1.5 billion for military spending is provided by the United States. Western advisers at the defence ministry believe that, if the interim government seeks to accelerate the Americans' timetable for growth (three divisions by the end of the year), funds could be withheld. Allawi's other ministries also depend on American aid for much of their capital budgets. This makes a mockery of the claim to sovereignty of any kind.

Behind the scenes the Americans will be taking all the important decisions. The government will be run by American advisers, who will tell the ministers what to do. Although all the ministries are now headed and staffed by Iraqis, some 150 mainly American advisers will continue to work from the same desks inside the Republican Palace as before the handover. (The British will run the show in the finance and defence ministries, the Australians in the agriculture ministry.)

The Americans say they are handing over a judiciary that is independent of the justice ministry. Is this true? This is what The Economist says: “The innocuous-sounding Central Criminal Court, staffed by American-picked judges to try ‘fast-track’ cases, is to return to the judicial fold after the handover. Already two members of the Governing Council have been summoned before the court. Many lawyers fear that after June 30th standards will slip again.”

Some 1,300 detainees are due to be released by July 1st. But the other 4,000-5,000 will stay in American custody until the Iraqi authorities can “guarantee due process and a secure court.” Saddam Hussein is expected to stay physically in American custody while being legally in Iraq's, and the Americans now say they will sign an agreement to this effect with the Iraqi government.

Iyad Allawi, has been selected by the CIA because he was seen as “tough”. He is “our kind of bully”, a State Department spokesman told The Economist. This reminds one of the notorious statement about the former dictator of Nicaragua, Somoza, that “he is a son of a bitch, but he is our son of a bitch.” This does not sound very encouraging for the advocates of democracy in Iraq.

The new regime will be armed with draconic powers. Under the temporary constitution, the Transitional Administrative Law (TAL), cabinet decisions are law, and decrees already in force, such as those that laid down a new press law or set up the independent regulator of state media and mobile phones, can be scrapped by cabinet order. It is rumoured that Allawi's “caretaker” government is planning to introduce martial law.

These powers are supposed to expire after elections for a National Assembly in January 2005. But this is highly unlikely, especially if security fails to improve. All the signs point in the opposite direction. In mid-June Kofi Annan, the UN secretary-general, announced that he was delaying the UN's return to Iraq until it was safer.

The main reason for bringing forward the handover by two days was the fears about the fast deteriorating security situation. There is an average of 45 attacks a day. On the eve of the handover the fighting intensified, with insurgents fighting the police in two towns west and north of Baghdad. A British soldier was killed in Basra and an American marine was said to have been kidnapped.

The main problem with elections in Iraq, however, is not the security situation. It is that if elections are held, the Iraqis might vote the “wrong” way. That is to say, they might vote for candidates who did not suit the USA. That would never do! It is known that Paul Bremer was reluctant to hold early local or national elections for fear that Islamists might win. The new interior minister is already warning about the dangers of “democratic militants”.

The reaction of the population to this development seems to have been contradictory. There must be an element of war-weariness among a big layer of the population, who long for peace. The wave of car-bombings and assassinations has left them craving the return of peace. Especially among middle class Iraqis, there may be some illusions in the new government. But this good will is dependent on a tangible improvement in the lives of the Iraqi people.

Theoretically, the new government will hold in its hands the wealth of Iraq’s vast oil deposits. But this also is an illusion. Iraq's oil revenues will not, in fact, be under the control of the Baghdad government. They will be overseen by the UN's international auditing and monitoring body. The UN resolution compels Iraq to honour deals already financed by the Americans from the country's oil revenues deposited in the Development Fund for Iraq (DFI). Since the start of the occupation, the Americans have already spent $11.3 billion of the $20.2 billion DFI revenues and have committed a further $4.6 billion.

Hundreds of millions of dollars were used to hire western military companies to secure strategic sites, such as the national broadcasting centre, and keep them out of Iraqi control. British security firms have been put in control of access to both Baghdad International Airport and the port at Um Qasr. Thus, almost all of Iraq’s oil wealth has already been spent in advance and the money safely deposited in the vaults of big US monopolies. Very little, if anything, will be left for the Iraqi people.

The general poverty and unemployment fuels anger which in turn fuels the insurgency. The continuing hostilities rule out a general economic revival. Guerrilla attacks on pipelines in the northern and southern oilfields have reduced exports sharply (costing Iraq $1 billion, Allawi says) and have cut supplies to power stations.

The Bush administration promised to create 850,000 jobs in Iraq. As of April, the Americans had created about 395,000 jobs. But most of these jobs have been handed over not to Iraqis but to western contractors, who are granted immunity from Iraqi law. And while jobs are parcelled out to such contractors, two million out of Iraq's workforce of seven million are still unemployed.

Hardly any of the $18.4 billions voted by the US congress for Iraq's 2004 capital budget has arrived. Although administrators have earmarked $10 billion for projects, they have awarded only $3.2 billion, most of which will go for building military bases. Sub-contractors complain that the coalition's largest contractor, KBR, is months behind on payments. Iraq is therefore in a vicious circle in which the economic crisis feeds off the insurgency and the insurgency feeds off the economic crisis.

Nor has George Bush succeeded in convincing his European friends to back him completely. Although they voted for the US sponsored Resolution in the Security Council, France and Germany are insisting on at least some debt repayments before they will return to operate in Iraq's post-war economy. This week, Iraq's president, Ghazi al-Yawar, complained that only 10 percent of Iraq's aid had arrived.

There is enormous hatred of the imperialists. This will not be removed by the establishment of a puppet Iraqi regime in Baghdad. According to a poll conducted by Baghdad's Centre for Research and Strategic Studies, only two per cent of Iraqis see the Americans as liberators. The vast majority see them as a foreign army of occupation. The resistance will continue, with ebbs and flows, for years. In the end, the Americans will have no alternative but to leave. The present action is only the first indication of this.

The real seriousness of the security situation was explained by The Economist in stark terms:

“The main arterial roads from Syria and Jordan through the desert to the capital fall in an area outside Baghdad's control, and the nine-kilometre stretch from Baghdad to its airport, known as Ambush Alley, remains Iraq's most dangerous road. American forces have handed two towns, Fallujah and Baquba, to their opponents after inconclusive battles.

“Other forces are also seeking to carve out their zones. Hotheads in the Shammar tribe are threatening to go on the rampage. The Kurds, entrenched in the north, have been pushing ever deeper into the oil-rich town of Kirkuk to the south. The limits of central authority were revealed when, the day after ordering that all Iraq's militias be disbanded, Mr Allawi backtracked and said that the two Kurdish regional governments could keep their peshmerga militias.

“Even in the capital, central authority has a small remit. Despite Mr Allawi's ban on militias, paramilitaries loyal to the Supreme Council for Islamic Revolution in Iraq (SCIRI), an Iranian-backed Shia group, took to the streets recently to protest against the burning to death of six drivers by Sunni extremists. Across the country the authorities claim that 500 courts are functioning, but even in the most elegant parts of Baghdad they have to compete with the roadside awnings of all-male sharia and tribal courts, known as fasls. Secularisation looks good on paper, but not on the streets. Under American pressure, women won 25% of ministries in the interim government and the Governing Council's Law 137, which imposed sharia law for personal affairs, was reversed. But honour crimes are again on the rise.”

The real intention of Washington is not to hand over power or withdraw from Iraq, but to make Iraqis increasingly responsible for repression. The revelations of torture in American prisons have caused serious political problems for Washington throughout the Middle East. On the other hand, the number of casualties in US forces is sapping public support for the Iraqi adventure in the USA itself.

The tactics of US imperialism in Iraq resemble the conduct of British imperialism in Ireland after the First World War. Unable to defeat the national liberation struggle in Ireland, the British ruling class decided to hand power to a government of stooges in Dublin, that accepted the formalities of power and undertook to repress the uprising. The result was a bloody civil war that lasted years and was characterised by the utmost savagery.

Allawi and his cronies are eager to be seen to be up to the job. They want to give their American masters proof that they are tough. The Economist reports: “The justice minister has called for the revival of the death penalty, the defence minister has promised personally to cut off rebels' hands and heads, and the interior minister has ordered his police into no-go areas such as Baghdad's weapons market. More daring policemen are issuing fines for driving offences for the first time since the war. Mr Allawi has also promised to reintegrate senior Baathists excised by Mr Bremer, and has announced the remobilisation of five of Iraq's disbanded army divisions to support the police. ‘Disbanding the Iraqi army was a big mistake,’ he says. ‘We are fixing the mistakes of the Americans, aren't we?’ ”

This is the language, not of a sovereign national government, but of a government of stooges and collaborators. The basic element in it are former supporters of Saddam Hussein, Baathist bureaucrats, police chiefs and army officers, many of whom were personally involved in the repression, murder and torture of the old regime. Allawi is a perfect example of this species.

Lacking any ideology, beliefs or principles, this despicable breed of opportunists attach themselves parasitically to any government that promises them power, wealth and privileges. Yesterday they sang the praises of Saddam Hussein, today they curse him. Yesterday they cursed George Bush, now they sing his praises.

The new (unanimous) UN Security Council resolution on Iraq has provided the necessary diplomatic camouflage for Washington to carry out this manoeuvre. This gives the American-led multinational force authority to use “all necessary measures”. Iraq's armed forces, it is understood, will be subject to the coalition's operational command, though the Iraqi government will take “strategic decisions” (whatever that might mean).

Even so, the new regime remains extremely feeble. Saddam Hussein had 70 divisions, while Allawi will have a single armed division of 8,000 soldiers. In addition, he will control the newly named National Guard, comprising 40,000 ill-trained local men. He will have no heavy weapons, and just 16 helicopters for transport and reconnaissance. His defence ministry has an extremely embryonic character (it still has no phone system).

Such a force cannot wage a successful struggle against the Iraqi insurgents, where the US army, with all its vast resources, has failed. But what it can do is to take upon itself all the responsibility and unpopularity of overtly repressive actions against the population. It has already announced a plan to send the Iraqi army from house to house in the Sunni towns west of Baghdad and the Shia towns south of it. This is the shape of things to come.

The government forces cannot defeat an opposition heavily armed with mortars and rockets. The main fighting force will be the Coalition – just as it is now. But the Iraqi collaborators will carry out most of the dirty work of repression, torture and murder, allowing the Americans and British to wash their hands like Pontius Pilate, and send all complaints to the address of the “lawful Iraqi authority”. The result will be a new spiral of violence and atrocities that will only serve to intensify the national liberation struggle.

One of the main elements in the equation is the morale and fighting spirit of the forces of occupation. Surrounded by a hostile population, sweltering in the summer heat, constantly on the lookout for ambush, American soldiers have grown increasingly demoralised and disenchanted with the war. Every new casualty, every new revelation of prisoner abuse, deepens the mood of despair. The average US soldier wants to go home. The possibility of mutinous conduct is implicit in the situation. This situation cannot be continued indefinitely.

The mood in the USA itself is slowly but surely turning against the war. The Presidential elections are looming. The example of Spain shows the possibility of sudden and violent swings in public opinion as the result of the war. This is another reason for the indecent haste of the so-called handover in Baghdad.

These manoeuvres can draw out the conflict and postpone the final decision, at the cost of further convulsions in Iraq and in the United States. But they cannot change the inevitable outcome. Sooner or later, the US army will be forced to withdraw from Iraq. The consequences of this are not easy to predict, at least in detail. But one prediction can be safely made. The world will not be a safer or more peaceful place as a result of George Bush’s Iraqi adventure.