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Editor’s Note: An impasse over election results and a new outbreak of violence have left the future of Iraq in grave doubt as President Barack Obama presses ahead on his promise to withdraw American combat forces by the summer.

Given Iraq’s continuing disunity, the Independent Institute’s Ivan Eland suggests that the United States use its remaining influence to help broker a change in the government toward a looser confederation of the rival Iraqi sects:

Recently, Massoud Barzani, president of the northern Kurdish region in Iraq, bluntly declared that the American visions of a strongly unified Iraq were “bird dreams and wishes.” Barzani then proceeded to heighten pressure for greater decentralization of the country and expanded Kurdish control over oil.

At the same time, Arab Sunnis, previously more inclined to keep Iraq together because their section of the country has few proven oil reserves, could very well resume their guerrilla war against the Shi’ite-led government.

If the plurality that the Sunni-backed Iraqiya bloc earned in the recent election is stolen from it by recount or disqualification of candidates, or if any new coalition government is established that leaves out the bloc, Sunnis could resume the insurgency.

Already the Sunni Awakening movement, former guerrillas the Americans paid off, is disillusioned by its electoral marginalization and broken promises by the Shi’ite-led regime to give its former fighters government jobs.

Meanwhile, most Shi’ite groups have also been receptive to creating a more decentralized country.

Although the Iraqi constitution creates a fairly decentralized state, the most worrisome development for Iraqi unity is Barzani’s increasing demands.

Barzani’s electoral gains — and because of Iraq’s post-election political stalemate, his ability to be a king-maker in selecting Iraq’s next prime minister — make him and the Kurds more strident in their quest for autonomy, or maybe even independence, and to grab the ethnically-mixed but oil-rich city of Kirkuk.

If civil war breaks out, which is entirely possible as – or after – American forces leave the country, it will probably start over this oil-saturated boundary line between Kurdistan and the Sunni Arab portion of Iraq.

Although the United States should have sponsored a conclave of all Iraqi ethno-sectarian groups to discuss decentralization before America lost much influence as a result of its projected troop withdrawal, this attempt to avert a likely civil war nevertheless still needs to be undertaken.

The Kurds are demanding action under Article 140 of the Iraqi constitution, which lays out steps for a plebiscite to determine the trajectory of the northern portion of Iraq, including Kirkuk. If this referendum is conducted without such a conclave in advance, the result could be explosive.

Iraq always has been an artificial country ever since its creation in the early part of the 20th century by the British, who pushed together three unrelated provinces of the old Ottoman Empire so they could get control of Iraq’s oil.

Only the iron fist of Sunni Arab dictators, the last of which was Saddam Hussein, held the country together — that is, until the U.S. invasion in 2003 ended the Sunni reign.

The Kurds have never really wanted to be part of Iraq, and most of the Shi’a want, at minimum, some autonomy from the central government. Even the Sunnis are fearful of paybacks from any majority-led Shi’ite central government, some of which have already been delivered.

Some analysts have claimed — and rightfully so — that the United States has already meddled enough in Iraq and made a mess of things. But that’s not what’s being proposed here.

The United States should use any remaining influence to avoid the impending train wreck, but only by sponsoring and mediating — not meddling in — the Iraqi conclave.

The Iraqis must reach their own settlement; but the impending U.S. troop withdrawal, current political stalemate, Sunni disillusionment with the electoral process, and increased Kurdish demands may very well make all groups much more receptive to a decentralized solution — provided the U.S. acts merely as a neutral facilitator.

Here are some things that Iraqis might want to consider in any such devolution arrangement. Any agreement to ensure post-U.S. stability would probably need to allow both Kurds and Shi’a the autonomy to manage and keep the earnings from oil production out of reserves in their territories.

Also needed would be some sort of gerrymandering or territorial swap, which would give Kurdish-populated lands now outside Kurdistan to the Kurds in exchange for the Sunni region getting access to more oil reserves.

Overall, the Iraqi central government needs to be weakened or the three groups will fight over control of this historically and potentially oppressive body. Thus, security and judicial functions probably need to be devolved to Kurdish, Sunni, and Shi’a regions.

The central government could be converted into an economic confederation, thus maintaining economies of scale in any common market, a common currency, and free trade and investment areas.

Most important, such a negotiated settlement should not be forced on Iraqis. But if they are unable to reach such a decentralization to self-government, ethno-sectarian fissures are likely to pull a post-U.S. Iraq apart violently.

Ivan Eland is Director of the Center on Peace & Liberty at The Independent Institute. Dr. Eland has spent 15 years working for Congress on national security issues, including stints as an investigator for the House Foreign Affairs Committee and Principal Defense Analyst at the Congressional Budget Office. His books include The Empire Has No Clothes: U.S. Foreign Policy Exposed, and Putting “Defense” Back into U.S. Defense Policy.

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