As American troop reinforcements head to Iraq, the Bush administration is slowly coming to terms with the realisation that elections scheduled for next month could spell the end of Iyad Allawi, prime minister and the secular US favourite, and usher in a quasi-theocracy.

Nothing is certain, not even the January 30 election date, yet there is a growing expectation in Washington that a coalition dominated by religious parties of the Shia majority is likely to emerge as the first Shia Muslim government in the Arab world.