Iraq's new leaders reclaimed their nation two days early, accepting limited power Monday from U.S. occupiers, who wished them prosperity and handed them a staggering slate of problems - including a lethal insurgency the Americans admit they underestimated.
With the passing of a sheaf of documents and a prime minister's oath on a red Quran, the land once ruled by Saddam Hussein received official sovereignty from U.S. administrators in a secretive ceremony moved up to thwart insurgents' attempts at undermining the transfer.
"The Iraqi people have their country back," President Bush said at a NATO summit in Istanbul, Turkey.
On paper, the U.S.-led Coalition Provisional Authority granted power to Iraq's interim government at 10:26 a.m., 467 days after the U.S. invasion began. The reality is more complicated: Some 145,000 foreign forces - most of them American - remain in charge of keeping rebellion at bay.
There were no major attacks throughout the day. But Al-Jazeera television reported early Tuesday that militants had killed a U.S. soldier held hostage since early April. It was not known when the American was killed. And after nightfall Monday, four heavy explosions rang out in central Baghdad, near the U.S.-held Green Zone - a near daily occurence in the capital. There was no immediate word on the cause.
The U.S. civilian authority, which rode in on a swift military victory that swept away Saddam's generation-long regime, withdrew quietly. Its leader, L. Paul Bremer, left Iraq aboard a military plane two hours after the transfer and was swiftly succeeded by U.S. Ambassador John Negroponte.
Hours later, NATO leaders agreed to help train Iraq's armed forces - a decision that fell short of U.S. hopes that the security alliance would take a larger role in Iraq.
The shift of authority was held in Baghdad's heavily guarded Green Zone against a backdrop of Louis XIV furniture and a row of Iraqi flags - the same green-black-red banner that flew over the nation while Saddam was in power.
"Please let us not be afraid of those outlaws that are fighting Islam," interim Prime Minister Iyad Allawi said in his inaugural address. "Some of them have already gone to the fires of hell and others are waiting their turn."
Bush, whose Iraq policy has drawn criticism abroad and, more recently, at home, was passed a note from National Security Adviser Condoleezza Rice that put it this way: "Mr. President, Iraq is sovereign." Bush wrote "Let freedom reign!" on the note and passed it back, according to White House spokesman Scott McClellan.
On the streets of the Iraqi capital, there was no sign of unusual activity or celebratory gunfire.
Iraq's tentative step toward democratic rule will operate under major restrictions - some imposed at the behest of the country's influential Shiite Muslim clergy, which wanted to limit the powers of an unelected administration.
The interim government will hold power for seven months until, by U.N. Security Council resolution, elections are held "in no case later than" Jan. 31. The Americans retain responsibility for security.
Bush raised no objection to Allawi's possibly imposing martial law in Iraq or other hard-line measures to deal with the insurgency, including Abu Musab al-Zarqawi, the most wanted militant in the country.
"He may take tough security measures to deal with Zarqawi, but he may have to," Bush said. "Zarqawi is the guy who beheads people on TV. He's the person that orders suiciders to kill women and children."
Though the government is unable to amend the interim constitution, it assumes responsibility for the daunting problems that have bedeviled U.S. occupiers for more than a year - public turbulence, a ruined infrastructure that has angered the citizenry and, most urgently, the accelerating and violent insurgency that has left hundreds dead. It must make initial attempts to stitch together a patchwork of ethnicities that Saddam pitted against each other - including Iraqi Kurds who had carved out a largely autonomous region in the north.
It also inherits responsibility for the fate of Saddam, the dictator-turned-prisoner whose harsh rule left tens of thousands dead. His brutality and Iraq's alleged terror links was one reason cited by Bush for the decision to invade.
Saddam will be transferred to the custody of his countrymen and will appear before an Iraqi judge in the "next few days" to face charges, officials said Monday. A military spokesman said he will remain in a U.S.-run jail because the Iraqi government lacks a suitable prison.
The months since his regime's demise have produced headache after headache for the U.S. government, even as it insists that slow, steady progress toward instituting democracy is under way.
As of Friday, 850 U.S. service members had died since military operations began last year, according to the Defense Department - 629 of them in hostile action. The number of Iraqi dead, officially unknown, is believed to be in the thousands.
On Friday, the Congressional Budget Office estimated the cost of the war will probably be $55 billion to $60 billion if troop levels remain unchanged.
No weapons of mass destruction have been found - the chief reason cited by Bush for war. Bombs have ravaged Baghdad, claiming the top U.N. official in Iraq among their victims. Abductions are increasing, violence has spiked and videotaped beheadings have horrified the world.
On a video shown Sunday, insurgents threatened to behead a U.S. Marine and a Pakistani driver they had kidnapped unless the United States releases all Iraqis in "occupation jails." Three Turks are also being held.
Most problematic for Washington has been the abuse of detainees by U.S. forces at Abu Ghraib prison outside Baghdad - a scandal brimming with details of sexual humiliation that has antagonized even Iraqis who support the U.S. occupation.
Some Iraqis said Monday's transfer meant little.
"The real date will be when the last American soldier leaves," Qassim al-Sabti, an art gallery owner, said after learning of the transfer. "Of course I feel I'm still occupied."
The Association of Muslim Scholars, an influential, year-old Sunni clerical organization that has criticized the occupation, said Monday's events "deceived the Iraqi people and the world."
"If the handover of authority had been accompanied by the withdrawal of the occupation troops, it would have been a proper handover and today would have been a day of festivities for all Iraqis to celebrate," Abdul Sattar Abdul Jabbar, a member of the association, said on Al-Jazeera television. "But what took place, as we've seen, is a formality."
The most recent U.S. occupations are cited, even by the countries occupied, as success stories. Japan, vanquished in World War II, emerged from American occupation as a budding economic powerhouse. The road for Germany was bumpier but is considered a similar triumph.
The transfer of sovereignty places Iraq's immediate future in the hands of two men with widely different styles and power bases: Allawi, a Shiite Muslim, physician and former Baath Party member with longtime ties to the State Department and CIA; and President Ghazi al-Yawer, a Sunni, American-educated engineer who lived for many years in Saudi Arabia and prefers traditional Arab dress.
"I will leave Iraq confident in its future," Bremer told them and fellow ministers at the handover ceremony.
Allawi lived for many years in London, while al-Yawer spent his time outside Iraq in the Arab world. Al-Yawer is seen as more in tune with Iraqi values and culture and has become widely popular as a champion of the Sunni minority. Although the presidency is largely ceremonial, many Iraqis expect al-Yawer to play an important role in public life.
Some world leaders expressed cautious enthusiasm at the developments. German Chancellor Gerhard Schroeder, an outspoken opponent of the U.S.-led invasion, sent congratulations and offered "trusting collaboration." Jordan's King Abdullah II praised a "landmark in history of Iraq."
Others said the event was a sham. "Occupation will wear a new dress," said Syrian political analyst Haitham Kilani.
Ali Hussein Ali, a retired teacher, held blue prayer beads as he played dominoes at a Baghdad cafe.
"People are afraid to express their happiness," Ali said. "When security prevails, Iraqis will be very happy. They will celebrate when the American troops leave and when they are no longer taking orders from the Americans."