In Al-Fallujah in November, a force of some 10,000-15,000 U.S. soldiers plus a small number of Iraqi troops fought street by street to evict insurgents from what had been their strongest bastion.
U.S. officials say the operation was successful. But it also brought the November death toll for U.S. troops to 136 -- the highest for any month since U.S. forces invaded Iraq in March 2003. And it was a grim reminder that after 22 months of U.S. efforts to build a new Iraq, the insurgency remains strong.
Security problems also severely set back efforts to reconstruct Iraq's economy.
The "Los Angeles Times" reported in November that less than $2 billion of the $18.4 billion allocated by the U.S. Congress for Iraq's reconstruction had been spent in 2004.
But while insecurity plagued Iraq in 2004, there was progress on the political front.
The U.S. occupation authority restored Iraqi sovereignty in late May, setting the stage for a series of elections in 2005. The polls are intended to give Iraq its first democratically elected government by the end of 2005.
U.S. and Iraqi officials insist the first elections will take place as scheduled on 30 January despite continuing violence in parts of the country.
Interim Prime Minister Iyad Allawi said the election will be as inclusive as possible: "There are some troubles in about 20 percent of the territories of Iraq. We are trying to reach out to the various constituencies in the country and to make sure that the political process is going to be inclusive, that all Iraqis would be represented in the political process."
The January polls will elect a National Assembly. The assembly, in turn, will choose a new interim government and appoint a body to write a constitution.
A nationwide referendum in October will then ask Iraqis to approve the new constitution. And the year's final elections would be a direct poll to replace the interim cabinet with a constitutional government.
The biggest challenge for U.S. and Iraqi officials now is to find a way to include large parts of the Sunni Muslim community in the January elections despite calls by some of its leaders to boycott them.
Some in the Sunni minority, Iraq's strongest community under Saddam Hussein, say a nationwide vote will hand power to the Shi'a majority.
But other Sunni leaders, including Iraqi Interim President Ghazi Ajil al-Yawir, are urging Sunnis to ignore the boycott: "Nobody in Iraq wants to boycott elections, except for some politicians. But I am talking about the mass public of Iraq. They all are very anxious to go and cast their votes and practice, for the first time in 45 years, their right and duty of voting for whoever they feel confidence in."
In the 30 January poll, more than 230 parties grouped into 89 alliances will vie for seats in the new National Assembly.
The biggest coalition formed to date is a broad grouping of Shi'a parties that also includes one of Iraq's largest Sunni tribes. The coalition could win a large proportion of the Shi'a vote because it is endorsed by pre-eminent Shi'a Grand Ayatollah Ali al-Sistani.
The coalition also includes representatives of radical Shi'a cleric Muqtada al-Sadr, whose Al-Mahdi Army launched two uprisings against U.S. forces in southern Iraq this year. The fact that these former rebels are competing in the poll is widely seen as a small victory for Iraq's new political process.
Elsewhere, Iraq's two main Kurdish parties have formed an alliance that could win a large part of the Kurdish vote in the north.
But even as Iraq now prepares to go to the polls three times in 2005, it remains to be seen how much the process will help stabilize the country.
Joost Hiltermann, a regional expert with the International Crisis Group in Amman, said a key problem in Iraq today is tensions between the Sunni and Shi'a over how power will be shared in the future. He said that holding elections now amid such tensions could further exacerbate tensions.
"The real question is what Sunni Arabs as a community and as individuals are going to say on Election Day," Hiltermann said. "Will they really feel that they should participate lest they be excluded? And I doubt that they feel that way because their feeling rather is that even if they participate, they will be excluded, not in the same way obviously because they will then be represented in the transitional assembly, but because they will be a political minority that may be the target of revenge."
But if the success of the elections depends largely on Sunni reaction to them, Hiltermann also noted that not holding the elections on schedule risks alienating the Shi'a. That makes either choice risky.
U.S. and Iraqi officials hope the rapid series of polls in 2005 will lead to a government with strong enough popular support to defeat the insurgents.
Security officials say ordinary Iraqis will begin informing on insurgents and turning them over to police only if they feel that the government is strong enough to protect them and their families.