Leading article: A mishandled hostage crisis and Iraq's uncertain future

The torment of the families of five Britons taken hostage two years ago in Iraq can only be guessed at. Earlier this month, hopes rose of a breakthrough after the release by American forces of a senior Shia militia leader linked to the kidnappers. But then, on Saturday, came the crushing news that the bodies of two of the hostages had been handed over to the British embassy in Iraq. The identification of the bodies yesterday at least brings some sense of closure to two anguished families. But the awful uncertainty surrounding the fate of the other three continues.

These grim developments add to the growing sense that the Foreign Office's decision to impose a media blackout on reporting of this kidnapping was misguided. The silence might have served some purpose in the immediate aftermath of the hostage-taking when a quick negotiated release might have been possible. But when it became clear that the kidnappers were prepared to dig in, public appeals could have applied valuable pressure. Uncomfortable questions arise too from the alleged influence of GardaWorld, a Canadian security company, on the Foreign Office's strategy.

Just as the agony of these families continues, recent days demonstrate that Iraq's pain is also far from over. A truck bomb on Saturday killed 73 and wounded 200, in the deadliest attack the country has witnessed this year. Levels of violence have fallen in recent months, but at least 1,678 Iraqis, civilians and security personnel have, nevertheless, been killed since January.

The target of this latest bombing was a Shia mosque in the town of Taza, 10 miles south of Kirkuk. Iraqi government officials suspect this of being an attempt by al-Qa'ida to re-ignite the sectarian bloodletting that almost tore the country apart two years ago. If such fears are confirmed, it will serve as a reminder that, while that fanatical alliance is not the force it was, it still has the ability to inflict mass casualties.

The location of this attack – oil-rich Kirkuk – also highlights one of the political fault lines in the country. The Iraqi government of Nouri al-Maliki has set public spending levels based on the assumption of a high and sustained international oil price. Global energy prices have picked up in recent months, but remain well below what the government had budgeted for, leaving it facing a potential financial crisis.

Prime Minister Maliki's government urgently needs to raise production levels. This explains the expected award in the coming weeks of long-term contracts to international firms to develop Iraq's large oil fields. But this is creating political tension, with opponents of Mr Maliki arguing that opening the door to foreign companies will curtail the country's future economic independence.

Considerable uncertainty hangs over the future of Iraq. British troops have handed over the control of Basra to American forces. And US troops are due to complete their pull-out of Iraqi cities by the end of this month, ahead of a complete withdrawal by 2011. But there are concerns about the ability of the Iraqi army and police to fill the security vacuum this is creating. A political crisis cannot be ruled out either. If the scenarios come together, the dark days could yet return.

Iraq has been heading in the right direction. But we underestimate, at our peril, the potential for the bloodshed to begin again.