Reuters is now reporting that high ranking Iraqi officials are talking about dividing the country –

BAGHDAD, July 21 (Reuters) – Iraqi leaders have all but given up on holding the country together and, just two months after forming a national unity government, talk in private of “black days” of civil war ahead. 

Signalling a dramatic abandonment of the U.S.-backed project for Iraq, there is even talk among them of pre-empting the worst bloodshed by agreeing to an east-west division of Baghdad into Shi’ite and Sunni Muslim zones, senior officials told Reuters. 

Tens of thousands have already fled homes on either side. 

“Iraq as a political project is finished,” one senior government official said — anonymously because the coalition under Prime Minister Nuri al-Maliki remains committed in public to the U.S.-sponsored constitution that preserves Iraq’s unity.  more

This can only mean more violence as the Sunni’s begin to fight for oil fields and other “prime” real estate.