This article discusses the challenges facing the government of Haider al-Abadi in Iraq, and outlines what ought to be expected in the coming stage, particularly after the fall of Mosul to ISIL. The paper reviews the failure of the regime post 2002 to insure equal participation of all segments of Iraq in the institution of power following the sectarian polices adopted by Nouri al-Maliki who exercised control over all the levers of the political regime and the public political institutions, and systematically harassed other politicians and parties – Sunnis in particular. The paper also reviews the American position, the intervention of the international coalition, and the establishment of the national guard. It looks at the other challenges facing the effort to keep Iraq together and help it emerge from its problems, including the threat of ISIL, sectarian division, the security situation, and the economy. The paper also reviews the regional overlap with the Iraqi situation, particularly the Iranian aspect, and what is transpiring as a new regional equation.