It is not clear that Colonel Hammes is on the right track when he calls for increased funding to build the infrastructure to bind the three segments of Iraq together (New York Times, June 1st., 2006, A 25).
An alternative case can be made that Iraq is an artificial state like Yugoslavia created out of the remnants of the Ottoman Empire after World War I and that its construction reflected the priorities of the so-called Great Powers rather than the preferences of the indigenous inhabitants. Accordingly, splitting Iraq into new Kurdish, Shiite, and Sunni dominated countries might be in the best interests of the Iraqis and the region.
The main stumbling blocks to the tripartite partition of Iraq are multi-ethnic neighborhoods, oil, and money. As Sunni-Shiite conflict increases, people are fleeing their multi-ethnic neighborhoods. If they can afford it they are moving abroad, if not they are moving to an area of Iraq where their co-religionists are dominant. Instead of trying to fight the insurgents let each faction have its own country and then deploy the US troops and the Sunni, Shiite, and Kurdish militias to facilitate large scale movement of people from their multi-ethnic neighborhoods to the parts of the country where they wish to live. Troops (and a large computer database) could ensure that Sunni families could "swap" the houses they owned in the Shiite part of the country with houses that Shiites owned in the Sunni section. Once all those people who want to move have been moved, the U.S. can withdraw its troops from Iraq.
Oil unfortunately is only found in the Kurdish and Shiite parts of the country, so that sharing the oil revenues is a source of friction between the three sectors of Iraq. I suggest that we do not try to engage in finding a correct formula for sharing those revenues between the three hostile faction. Rather, I suggest that the Shiite country keep all its oil revenues, that the Kurds keep all their oil revenues, and that the US step in to ensure that the Sunni state is financially viable by agreeing to pay a subsidy of $22 billion per year (roughly equivalent to five-twelfth of Iraq's oil revenues at current prices; and much less than the $95 billion annual economic cost of the war) for a twenty year period. By providing this subsidy at this level, each of the three pieces of current Iraq will do rather better out of the oil revenues than they would if Iraq were kept together in an uneasy federal system.
This separation of Iraq into homogeneous religious and ethnic states will undermine the raison d'être of the insurgency. It will give the inhabitants of the three states the opportunity to develop indigenous democratic systems. It will give them the option, if they so desire, to build a federal state in the future. Most importantly it will enable the U.S. to extricate itself from Iraq and leave behind three states with a high potential for stability.