Baqubah, the capital of Iraq's Diyala province, is a largely colorless place except for the winter orange harvest and the hundreds of campaign posters that line its streets. But at least the sectarian battles between Sunnis and Shi'ites that once raged through the city are now confined mostly to the ballot box as Baqubah, along with the rest of Iraq, prepares for national parliamentary elections on March 7. Inside the fortified government headquarters, Diyala's governor, Abdul-Nasser al-Mahdawi, is relatively optimistic that the elections — the fifth poll since the U.S. brought democracy to Iraq — will go smoothly. "The country is getting better at elections," he tells TIME. "In the first, the fraud was about 40%. In the second, let's say 20%." Still, al-Mahdawi, who belongs to a Sunni party that opposes Prime Minister Nouri al-Maliki's Shi'ite-led governing coalition, worries about an élite counterterrorism unit run by al-Maliki's office, which, he says, is responsible for the arrests of scores of opposition politicians and government critics in Diyala. Two months ago, members of the unit took the deputy governor, Mohammad Hussein al-Jabouri. "Of course it's totally political," says one of the governor's aides. "If he is really a terrorist, why didn't they arrest him before he was elected?"Democracy is messy everywhere. In Iraq, it is both messy and dangerous. The country has now had more practice at choosing its own leaders in relatively open elections than perhaps any Middle Eastern nation besides Israel and Lebanon. In 2003, many U.S. architects of the invasion of Iraq and the removal of Saddam Hussein hoped the events would be followed by a democratic ripple effect throughout the region. That has not yet happened. The politicians who came to power after the country's first parliamentary election five years ago have been unable to resolve core issues — from deciding how to share oil revenue to how to balance power among the country's regions and the central government and how to weld fractious religious and ethnic groups into a unified nation.But now Iraq has another chance. The surge of American military forces in 2007 bought time for Iraq's leaders to work out their problems. The U.S. is betting that they can. The Status of Forces Agreement worked out between the Bush Administration and the Iraqi government holds that the U.S. must withdraw all combat troops from Iraq by the end of August and the remaining 50,000 support troops by the end of 2011. The Obama Administration has stuck to the timetable. With one eye on a developing political maturity in Iraq, Vice President Joe Biden has predicted that Iraq could be one of the Administration's "great achievements." He said recently, "You're going to see a stable government in Iraq."There is indeed much for Iraqis to be proud of in their fledgling democracy. Since a new law opened elections to anyone who wants to hold office — rather than letting only the political parties stuff the lists of candidates — anyone and everyone seems to be running for parliament. There are about 6,000 candidates for 325 seats, and some 86 parties taking part in the election. The sectarian and ethnic political parties whose leaders tore the nation apart are still the country's most powerful, but they have joined in loose multiethnic and multisectarian coalitions. "Obviously there are still going to be candidates who just parrot what their leader says, but that's not going to be as effective this time," says an official with a U.S.-funded NGO that works on democracy training. Iraq's political class, she says, is learning that "they have to let the public define the issues, rather than defining the issues for them."That's accurate. The parties are running their campaigns in large part on substantive issues: most important, whether power in Iraq should be more centralized in the hands of the government in Baghdad or dispersed to its provinces and regions. The centralizers include al-Maliki's Shi'ite-dominated State of Law coalition, which is running on its record of providing security and disarming Iraq's militias. The more Sunni and secular Iraqi National Movement, led by former Prime Minister Iyad Allawi, is likewise in favor of a strong central government. The push for decentralization is represented by the ruling parties of the Kurdistan Regional Government and an alliance of Shi'ite parties — led by Ammar al-Hakim and chastened warlord Muqtada al-Sadr, among others — that critics claim is bent on creating a semiautonomous Shi'ite enclave in oil-rich southern Iraq.The Virtues of CompromiseThese issues are political dynamite. Devolving power to Kurdistan or to the Shi'ite south — the two safest, richest parts of Iraq — could reignite the civil war between Shi'ites and Sunnis or start an additional one between Arabs and Kurds. But to centralize all power in a country with a history of totalitarianism has its own perils. That's why Iraqis will be watching their elections closely: not just to see the results but also to gauge whether their leadership class can accept the outcome of the vote and move forward peacefully. That will not be easy. "It's hard teaching people who have come out of a dictatorship to negotiate with each other," says the U.S. NGO worker. "In a dictatorship, all they know is win-lose. It takes time for them to learn that in a democracy you can have win-win compromises."There is plenty of reason to be concerned that Iraq's leaders haven't yet learned to compromise. None of the five leading political blocs are likely to emerge from the election with enough seats in parliament to form a government on their own — which means Iraqis may have to endure weeks of political wheeling and dealing. Meanwhile, Iraq's undercurrent of violence and sectarianism is resurfacing as the election nears. Dozens of bodies are turning up daily in the morgues of Baghdad and Mosul, including some with their heads cut off, a signature al-Qaeda calling card. Mortar shells are falling once again on the International Zone, probably the handiwork of radical Shi'ite militias. "After 2003, Iraqi politics got so complicated, with so many parties, and so many foreign countries got involved that it's like the whole political scene is built on straw," says Hazem Shammari, a professor of political science at Baghdad University. "If one thing goes wrong, we'll go back to [civil war]."The Return of ChalabiDemocracy in Iraq can't go too far off the rails while U.S. soldiers are still in the country. "No one will attempt a coup d'état while the U.S. is in Iraq," says an al-Maliki aide. "Unless the U.S. is behind it." But with a date set for the end of the American occupation, U.S. influence in Iraq is already waning. Ironically, the best proof of that is the rise, once again, of Ahmad Chalabi. The formerly exiled leader of the Iraqi National Congress — an anti-Saddam dissident group — helped the Pentagon plan the invasion of Iraq and was the candidate of U.S. neoconservatives to be the country's new leader. Chalabi fell out with the U.S. in 2004 and has reinvented himself as a Shi'ite nationalist allied with the Sadrists. As the co-head of a secretive government de-Baathification committee, Chalabi helped orchestrate the banning of about 500 mostly Sunni candidates from running in the election, a move that revived fears of a return to sectarian violence. "The Americans say they came here to build democracy, but what kind of democracy is this?" asks Saleh al-Mutlaq, the leader of the country's second largest Sunni Muslim party and one of the banned candidates. "The Americans brought Ahmad Chalabi to Iraq. They should solve this problem, or they should just leave."Though some in Iraq continue to doubt Washington's resolve, U.S. troops are indeed leaving, at the rate of about 10,000 per month. Much as they may enjoy their democracy, many Iraqis are concerned about who will fill the vacuum. Iran, for example. Tehran watched with glee as the U.S. toppled its archenemy Saddam, but worried that it was the next candidate for regime change, the Islamic Republic has supported anti-American Shi'ite militias and political parties ever since. Iran won't be the only country likely to flex its muscles after the election. Turkey — which has a restive Kurdish minority of its own — will try to block any further devolution of power to Kurdistan. And last month, Saudi Arabia's King Abdullah invited leaders of a pro-Sunni coalition to visit Riyadh, a sign that the kingdom would like to play a role as protector of Iraq's Sunnis. "Everyone in the region will try to occupy Iraq," says Sheik Hussam al-Mojammai, the head of Baqubah's Awakening Council, a Sunni citizens' brigade that helped defeat insurgent groups in the province. "Even little Djibouti."With so many foreign powers playing politics in Iraq, the future of the nation will depend on the skill, maturity and willingness of its leaders to compromise. Plenty don't think they are up to the task. "They are going to push us back to civil war," says Daha Arwai, the head of a charity that looks after the children and widows of men murdered by militias. Will Iraq's leaders prove her wrong? Joe Biden is convinced they will — but then, the Vice President is one of life's sunny optimists. Most others, watching Iraq, have their fingers very firmly crossed.