The US and Iraq are careening towards an unclear future concerning their relations. At the heart of the problem is Iran’s desire to eject US forces from Iraq, the lack of a clear mission for the US-led Coalition, chess moves by Iranian-backed militias in Iraq and preparations for a “strategic dialogue” with Baghdad.Iraq has a new prime minister named Mustafa al-Kadhimi and he finally has a government. The last seven posts in his cabinet were approved. There are now 22 members of the cabinet, and Kadhimi is happy. After more than eight months of chaos and protests, Iraq could be on a new track.But COVID-19 has shut airports, there are fears of the virus in the capital and a new ISIS insurgency and protests continue. There is also a budget crisis due to oil prices, the need to buy energy from Iran and discussions with the Kurdistan autonomous region over salaries. US-led anti-ISIS Coalition spokesman tweeted on June that the Iraqis were hunting down ISIS as part of the “heroes of Iraq” operation. This includes, he wrote, the Iraqi army, Counter-Terror Service, Federal Police, Hashd al-Sha’abi and other units.The Hashd, or Popular Mobilization Units, are a large group of dozens of militias, formed into some 50 brigades that play a key role fighting ISIS but also are hostile to the US and tend to be linked to Iran. Meanwhile in Najaf in southern Iraq the protests, which have rocket Iraq since October, have burned property and asked the governor to resign.Somewhere else in Iraq, Lt. Gen. Abdel-Amir Rashid Yarallah has been appointed the new Chief of Staff of the armed forces. He was once close to Abu Mahdi al-Muhandis, the deputy of the PMU, who the US killed in January 2020.The PMU is angling to make sure that Kadhimi includes them in discussions with the US and the “strategic dialogue,” according to tweets by Kataib Hezbollah-linked accounts. Muhandis was the former commander of Kataib Hezbollah and the group carried out dozens of rocket attacks on bases with US forces in Iraq, killing several Coalition personnel. The US carried out two rounds of airstrikes on the group, in December and March. The inclusion of these PMU or “Hashd” units in discussions with the US is concerning because they are seen as loyal to Iran. Other Hashd units, such as Harakat Hezbollah al-Nujaba, have shared photos of burning US flags and coffins, indicating they are ready to fight the US. These US sees many of these groups or their leaders, such as Qais Khazali, as designated terrorists.Indeed, Nujaba’s Nasr al-Shammari put out a statement saying any talks with the US must be predicated on the complete withdrawal of US and foreign forces. “We do not recognize them,” otherwise. His point is to hold a sword over Kadhimi’s approach, a threat to do what the militias want.Iran is following Iraq closely. Iranian media and Syria’s SANA said 50 US vehicles crossed to Syria from Iraq as part of anti-ISIS operations on June 7. Iran wants to push through a deeper memorandum of understanding with Iraq. Iran’s Foreign Minister Javad Zarif called Iraq’s Fuad Husssein on Sunday to emphasize this. The US might be considering cutting financial aid to Iraq if talks don’t go well. Iran doesn’t mind, it wants Iraq dependent. But this is a hard deal to thread because senior Iraqi officers are messaging that US forces are not needed to fight ISIS. The US has repositioned forces anyway over the last months, moving them further from areas where there is contact with insurgents or the Iranian-backed militias.What do US officials think? US Assistant Secretary of State for Near Eastern Affairs David Schenker said last week that “to reset and renew our relationship, [we] will be renewing our strategic dialogue next week and we hope to follow up with an in-person meeting sometime in July or August.” COVID-19 precludes travel until then.There are other issues up in the air in Iraq. It appears that the powerful boss of the Badr Organization and head of the second largest political party in parliament, Hadi al-Amiri, has resigned from parliament and may be angling to run the PMU. Currently, the PMU is headed by Falih al-Fayyadh. Fayyadh and the PMU poured cold water on the rumors that Amiri will be moved to the PMU. But the PMU still has restructuring issues, and there are calls for it to reduce sectarian units, and also there are the pro-Ayatollah Sistani territorial brigades of the PMU which want to split from the organization and be under the Prime Minister’s Office. Unit commanders are unhappy with Abu Fadak, the Muhandis replacement.Focus on the US discussions may relate not only to maneuvering by the PMU behind the scenes and calls by Iran for the US to leave, but also to the view that Iraq can be seen through a kind of “Lebanon lens,” where the US works with the Iraqi army and tries to “moderate” the PMU.Nafiseh Kohnavard, a journalist and expert on Iraq and the region, tweeted on Sunday that the US might even be looking to bifurcate the PMU into “bad Hashd” and “good Hashd.” What might this mean practically?It could mean that the Badr units or some of the Sistani units could be seen as “good” while Asaib Ahl al-Haq, Harakat Hezbollah and Kataib Hezbollah would be seen as “bad.” There are indications some in the US see Badr as a group one can work with while the US has systematically gone after other PMU units linked to Iran’s IRGC, labeling them terrorists.The overall trend in Iraq is difficult for the US. Abu Ali al-Askari, spokesman of Kataib Hezbollah, slammed the US in quotes to Iran’s Tasnim, making it seem that the PMU was sidelined in discussions. As the US and Iraq move towards these discussions, Tehran will be there to undermine them. That much is clear.