Iraq’s three factions agreed to major compromises this weekend. Legislation will be drafted and passed next month.

The counterinsurgency operation, the Iraqi Awakening movement, and the reconstruction of provincial governments created the atmosphere to allow a real central government to form. Iraqi Reconstruction is a bottom-up process.

The US Security plan and the reconciliation of the Sunni Tribes created this momentum. This turned the Sunni Insurgency against Al-Qaeda and Islamists and brought them into the Sunni Provincial governments. This created an opportunity to reconcile the tribes with the Shia-Kurdish led central government.

The central government’s greatest task was just to recognize the reality on the ground. De-Baathification was a sensative issue for Shia who had been oppressed by the Sunni Ba’athists. However, ex-Ba’athists joined the police force and patrol with the American and Iraqi Army. The government can only accept this reality.

The Parliament’s “vacation” was nothing of the sort. The members of parliament and all governmental leaders worked throughout the summer. The parties had to recognize that the public’s opinion changed, especially in the Sunni Triangle, and evaluate the merits of different reforms and compromises.

Now they have agreed on the compromise legislation.

Iraq’s top Shi’ite, Sunni Arab and Kurdish political leaders announced on Sunday they had reached consensus on some key measures seen as vital to fostering national reconciliation.

Iraqi officials said the five leaders had agreed on draft legislation that would ease curbs on former members of Saddam Hussein’s Baath party joining the civil service and military.

Consensus was also reached on a law governing provincial powers as well as setting up a mechanism to release some detainees held without charge, a key demand of Sunni Arabs since the majority being held are Sunnis.

Yasin Majid, a media adviser to Maliki, told Reuters the leaders also endorsed a draft oil law, which has already been agreed by the cabinet but has not yet gone to parliament.

This continues the trend of recognizing de-facto Federalism in Iraq. There will be more power and resource sharing over time.

One of the better signs is the improvements made to the Iraqi Army. It’s a better at fighting, yes, but significantly it represents all three factions and will not be turned into a violent tool for one sect. This will hopefully prevent military abuse or dictatorship over the long-haul.