( AP )- The U.S. ambassador to Iraq said Sunday that recent successes such as reducing violence have created a new set of challenges for 2008 - the most important being the return of refugees and the struggle for political reconciliation.
An equally significant factor, Ryan Crocker said, will be whether neighboring Iran uses its considerable influence among the Shiite majority to ease the strife that has torn this country apart - or instead create further instability.
"The positive developments in the latter half of 2007 represent the challenges of 2008," Crocker told reporters in Baghdad. "There will be the ongoing challenges of reconciliation, and if there is a single overarching issue that will determine the future of this country that is it for me in one word."
Others include the return of hundreds of thousands of Iraqis who have fled to Jordan, Syria and beyond - a repatriation which Crocker said must be handled carefully "so it doesn't sow the seeds of new tension and instability."
Equally important will be finding how to reintegrate the growing numbers of Sunni Arabs joining volunteer groups funded by the United States to fight al- Qaida in Iraq. There are about 70,000 Sunni irregulars in the groups known as Awakening Councils - dubbed by the U.S. military as Concerned Local Citizens.
The groups, along with a surge of U.S. troops into Iraq and a decision by firebrand Shiite cleric Muqtada al- Sadr to stand down his Mahdi Army militia for six months, have contributed to a 60 percent drop in violence since June.
But the Shiite-dominated government is deeply concerned about the groups, many of which are made up of former Sunni insurgents who once battled both the American forces and their Shiite allies.
There are plans to absorb about 20,000 men into the security forces, and Crocker said America plans to spend $155 million to help create new jobs and provide vocational training. The Iraqi government would match that amount, he added.
"They also present a challenge," Crocker said of the Sunni groups. "They have got to be accommodated in some way that meets their needs and concerns, but this has to be done in a way that also ensures that other elements of the population and government are comfortable with."
Another immense challenge will be how to deal with al- Sadr's Mahdi Army that has gone from "militant" to "incorporated."
"It still very much exists as a militia structure, just smart enough not to be carrying arms through the streets, but in effect controlling various neighborhoods - jobs, real estate and gasoline, what have you. That as a long term challenge is going to be huge," Crocker said.
Nothing in Iraq, however, is clear cut or simple, and Crocker said external factors such as Iran will continue to play a big role in the future stability of the country - which slipped in and out of chaos in the years following the 2003 invasion by a U.S.-led coalition.
"If it's a case of the Iranians moving down a road of using influence to reduce rather than to foment violence, that is a good thing. They would still in our view have a way to go," Crocker said.
Iran's influence remains powerful but Crocker acknowledged it was hard to predict whether it will remain that way and how they might wield it moving forward.
"I think that as we have seen in past, if the Iranians want instability in Iraq they are well positioned to create it, and create it in substantial amounts. Can they exercise sufficient negative influence to prevent the emergence of a stable Iraqi state? I'm not sure," he added.
Iraq's other neighbors also must exercise caution, the ambassador warned.
Turkey, for example, has the right to defend itself against Kurdish rebels based in northern Iraq but must make sure it does not destabilize its neighbor, he remarked.
As he spoke to reporters in the capital, Turkey was bombing positions held by the Kurdistan Workers' Party for the third time since Dec. 16.
"We all have a pretty substantial interest in the stability of Iraq and none of us want to see operations pursued in a manner that can threaten basic stability inside Iraq," he said.
In other developments, a roadside bomb targeting an Iraqi army patrol in Baghdad killed two civilians Sunday, as attacks claimed the lives of at least five people.