Rupert Cornwell: Out of America

In this bleak twilight of his presidency, is something at last going right for George W Bush? Look not for an improvement in his popularity: a large majority of Americans have long since had enough of him. But on the great issues that have bedevilled him, there is at last some good news to report. Not only is there a flicker of hope for the future, but the sweet taste of vindication as well.

First, the vindication. Back in 2001, Bush was roundly criticised when he banned federal government funding for stem cell research using new human embryos – challenging science to come up with more morally acceptable solutions. Liberals and other right-minded people were outraged at what they saw as a display of Luddism from a born-again Christian. It was proof, they said, of how social conservatives, obsessed with fighting abortion and anything that could be construed as abortion, would callously halt the search for a cure for Alzheimer's and other diseases.

Now, it seems, the challenge has been met. Scientists have persuaded normal skin cells to act as embryonic stem cells. If the breakthrough is confirmed, the stem cell controversy that split America may soon be seen as a fleeting irrelevance. If so, then score one to Bush.

Score two is more problematic. This week it is just possible, in the pretty town of Annapolis on the Chesapeake Bay, that the seeds may be sown of a long overdue foreign policy breakthrough, with the Israeli-Palestinian discussions hosted by the President. Call it what you will: conference, meeting or mere "get together". The important thing is that the event is the first of its kind since the collapse of the Camp David talks in 2000.

Critics dismiss the gathering as a photo-op, intended above all to show that there is life in lame ducks. The problems are the same intractable ones as ever: Jewish settlements, the right of return for Palestinians and the status of Jerusalem. And the chances of a solution look remoter than ever. But the White House says it is going all-out for a settlement by the time Bush leaves office in January 2009. Saudi Arabia has agreed to come, and Syria may do so as well. And who knows?

The best news of all, however, has come on the toughest issue of all – Iraq. At the start of this year, faced with the prospect of the country descending into total anarchy and civil war, the President defied the combined wisdom of the bipartisan Iraq Study Group and most policy experts. Rather than pulling US troops out, he decided to send more in. At the time it seemed like a reckless double-or-quits bet. Instead, five months after it became operational, the surge is working, in military and security terms at least.

Given the deepening US credit crunch and the growing risk of recession, it's no surprise the economy has supplanted Iraq as the biggest worry in voters' minds. But not only has Iraq faded somewhat from the news. For the first time in ages, the news you do read these days may just be good news. The most obvious change has been the decline in violence. Iraq remains a lethal place. But in October, "only" 39 American soldiers were killed, the lowest monthly figure since March 2006, according to the US military. Reported Iraqi civilian deaths fluctuate, but are running at roughly half the average 2,000-per-month rate of a year ago.

One reason, indubitably, is the surge. The extra 30,000 men on the ground have enabled General David Petraeus, the commander of US forces in Iraq, to go into new neighbourhoods, and stay in them, thus expanding areas where streets are safe. Another factor has been the ceasefire called at the end of August by the Mahdi Army, the militia run by the anti-American Shia cleric Muqtada al-Sadr, and which seems to be holding. As a result both intra-Shia killings and Shia violence against Sunnis has dropped.

Third, in a trend that started in Anbar province and spread eastward to the capital and other Sunni regions to the north, Sunni tribes have had enough of the local al-Qa'ida, once an ally in the common insurgency against the Americans, but now seen as a main obstacle to the return of a semblance of a normal life.

None of this, though, is to suggest that peace is descending on Iraq. On Friday alone, 13 people were killed by a bomb at Baghdad's leading pet market; the day before, a dozen people, including three Iraqi soldiers, died in clashes with fighters believed to have links with al-Qa'ida. In America itself, it would take merely an attack that killed, say, a dozen US troops to bring the war back into the public consciousness, front and centre. For now, however, Americans may read not about ethnic cleansing and Iraqis fleeing their homes, but about former refugees returning to them.

Some 4.4 million Iraqis, roughly one in six of the population, are reckoned to have been displaced during four years of unremitting violence since the US-led invasion. Two million were internal refugees, but even more fled abroad. Now, albeit gingerly and still fearful, they are starting to come back – at the rate of 1,000 a day, according to the Iraqi authorities. Gradually, people are venturing out of an evening again. Markets too are re-opening – albeit many of them in sealed-off neighbourhoods, akin to sectarian ghettos, where access is tightly controlled.

Quite possibly, the improvement will not last. In every protracted war, violence ebbs and flows, and in Iraq, national political reconciliation between Shias and Sunnis is as distant as ever. Much of the progress made by Petraeus reflects co-operation between the Americans and local and provincial tribal leaders, who are being given large quantities of arms – a recipe for a splintered state, rather than the unitary state that Washington wants. And while security is much improved in Baghdad, Shia groups still vie with each other for supremacy in swathes of the south while, reports say, insurgents are active around around Mosul and Kirkuk in the north.

But however shortlived, the improvement has already affected US politics. It has lifted the struggling White House bid of John McCain, one of the strongest supporters of the surge. It has also made it even harder for Democrats to push through a timetable for troop cuts. Had the chaos and carnage continued unabated, Congressional Republicans might have abandoned Bush in droves, to save their own skins in next year's elections.

Instead Republicans have closed ranks. Barring unforeseen disaster, Bush may have bought time for his Iraq strategy until he leaves office, leaving the really tough decisions to his successor. Yes, there will be troop withdrawals: by next spring we may be back to where we were before the surge, with an American force of roughly 130,000 in Iraq. And even the leading Democratic presidential candidates are beginning to acknowledge that whatever happens, there will have to be a substantial US presence, of anything up to 70,000 men, for years, if not decades, to come. In other words, another vindication for Bush – of sorts.