This Commentary first appeared as an op-ed in The National, July 25, 2010.

After the March 2003 invasion of Iraq by United States and coalition forces, a short but sharp war, and the declaration of “Mission Accomplished” aboard an American aircraft carrier, Iran felt isolated and encircled on all sides by US might. Not so today.

Tehran has closely observed US travails in Iraq over the years, and watched with satisfaction as the US began withdrawing its forces in anticipation of a full withdrawal by the end of 2011.

Iran views 2010 as a year of opportunity: to make sure a friendly Shiite government continues to hold the reins of power in Baghdad, and to progressively shunt aside the US as the country’s chief power broker. If anyone should feel strategically encircled at this point, it is the US. The problem is, Washington doesn’t seem to realise it yet.

America’s predicament was clearly illustrated by Iraq’s government formation politics over the last three weeks. The US vice president Joe Biden, the Obama administration’s point man for Iraq, paid a lightning visit to Baghdad over the July 4 weekend to urge Iraq’s political leaders to form a new government quickly. He reassured Iraqis that the US would continue to maintain a strong, effective, and multifaceted relationship with Iraq even after the troops go home.

The secretary of state Hillary Clinton echoed these views after her July 13 meeting in Washington with Iraq’s foreign minister Hoshyar Zebari. She too underscored the “crucial need” for Iraqis to form a government soon, and affirmed the US commitment to Iraq. “We are committed to this relationship,” she said. “We are working every day to create a very strong foundation for a long-lasting relationship between the United States and Iraq, and the reduction in troops in no way reflects a decrease in American engagement with Iraq or our commitment to the Iraqi people.”

At the time, it seemed that Washingon finally was actively involving itself in the formation of a government, realising the gravity of the consequence should there be a power vacuum in Baghdad when the US draws down to 50,000 troops at the end of August. But the White House made clear that the US still would not take a position on candidates for prime minister or other ministerial slots. As one official travelling with Biden put it: “There was no discussion of individuals, there was no discussion of who gets what job, again there was no discussion of an American plan for Iraq because there isn’t one.”

Iran, by contrast, does have a plan. Tehran and its regional proxies proved quick to step in again as soon as Mr Biden left. Last week, Iran summoned representatives of the prime minister Nouri al Maliki’s State of Law coalition and the pro-Iranian cleric Moqtada al Sadr’s bloc to meet in Tehran to hash out a compromise on Mr al Maliki’s candidacy for a second term, to which the Sadrists insist they are adamantly opposed. State of Law subsequently offered Mr al Sadr a raft of concessions to win his support, including prisoner releases and ministry positions.

Iran’s ally Syria, meanwhile, hosted Mr al Maliki’s chief opponent, Iyad Allawi, for talks in Damascus. Mr al Allawi stayed on to meet with Mr al Sadr in a move undoubtedly co-ordinated between Tehran and Damascus to heat up the bidding war for Mr al Sadr’s affections.

Iran’s aim is simple: to force the main Shiite coalitions into a marriage of convenience in which religious Shiite parties maintain their grip on power, other parties – including Allawi’s coalition, the Kurds, and perhaps some token Sunnis – are nominally represented in the government, and the US is marginalised.

So far it appears to be working.

Many in Iraq wonder what happened to the new American activism after Mr Biden left. They understand the principled position that Washington has taken – to refuse to dictate political outcomes in a nascent democratic society. However, they worry that this is the wrong moment for America to take its hand off the wheel.

As Mr Zebari recently told The Washington Post, the US “role has not been active … They could do more. To say this is a problem for Iraqis, you deal with it, is fine – but after more than four months we are not making progress.”

The US says it wants to maintain a vibrant bilateral relationship after withdrawal, and it has some important regional interests riding on this. Yet, the prospects for such a relationship will undoubtedly dim should Iran’s favoured scenario come to pass.

The US should reassess its hands-off policy now. Mr Obama should become personally engaged. Mr Biden should maintain his active involvement, returning to Iraq to support the efforts of our diplomats as often as needed. The US might also do well to engage its Gulf allies and Turkey to explore a quiet, co-ordinated approach.

By bringing to bear the considerable leverage it still possesses, the US can prevent Tehran and Damascus from dictating the formation of the Iraqi government, and help form one that reflects the will of all Iraq’s people.

Assertions and opinions in this Commentary are solely those of the above-mentioned author and do not necessarily reflect the views of the Middle East Institute, which expressly does not take positions on Middle East policy.