THE handover of power to the new government in Baghdad is not a momentous occasion.

In essence, the situation in Iraq is unchanged. Tens of thousands of American and British troops remain stationed there, and will stay there for the foreseeable future.

Without the presence of such a mighty military force, the fledgling civilian administration will collapse.

The prospect of the regime being strong enough to allow the Coalition forces to head back home is a long way off.

Terrorists and reactionary forces within Iraq represent a real threat to the rule of law.

Nevertheless, the handover of control is an important symbolic event. It marks the first, but small step towards the eventual creation of a self-sustaining democracy in Iraq.

It was an astute move to bring forward the event by 48 hours. As a result, the occasion was not marked by a terrorist atrocity, as may well have been the case on June 30.

But the death of a British soldier in Basra yesterday shows the fragile nature of the so-called peace in the country.

Before there is the creation of a truly sovereign government in Iraq, two truly momentous events need to happen.

The first is the staging of free and democratic elections, which can provide the Iraqi people with tangible evidence of the virtues of freedom.

The second is the withdrawal of the occupying forces. Only then can Iraq call itself free, and, by doing so, deny the insurgents a target for their hatred and acts of terrorism.

Sadly for President Bush, such momentous events will not occur before November to breathe new life into his spluttering re-election campaign.

For the Prime Minister, too, the slow progress in Iraq is unlikely to coincide with his election timetable.