The Obama Administration’s Iraq policy is in disarray amid reports that negotiations have broken down with the Iraqi government over extending the U.S. military presence past the end of the year.

The Associated Press reported on Saturday that all U.S. troops would leave Iraq by December 31, except for 160 active-duty troops attached to the U.S. embassy in Baghdad. The Obama Administration denied this report, maintaining that negotiations were continuing and no final decision had been made.

The Obama Administration had been negotiating to extend the U.S. military presence, now down to about 40,000 troops, past the December 31 deadline for withdrawal set by the 2008 Status of Forces Agreement. But Iraq’s government reportedly refused to continue giving immunity from prosecution in Iraqi courts to any U.S. troops that remain beyond December 31.

This is a deal-breaker, because it would expose American personnel to unacceptable risks and make it almost impossible to do their jobs without being exposed to potential arbitrary prosecution by Iraq’s politicized police and judicial authorities.

Although Iraq’s armed forces have made major progress, they require continued U.S. training and support in air operations, naval operations, intelligence gathering, logistics, and counterterrorist operations. But Iraqi Prime Minister Nouri al-Maliki has timidly ignored the calls of his own military officers to publicly support the extension of the American military presence, concerned that such an act would leave him open to criticism for being an American puppet. An anonymous Western diplomat warned, “No one has the political courage to grip this and it will just drift.”

Many Iraqi leaders are also unwilling to raise Iran’s ire, apprehensive that they could be targeted for political retaliation or even assassination. They perceive the Obama Administration as being anxious to exit Iraq and unwilling to confront Iran. This makes them much less likely to compromise on the immunity issue or to take political risks to support strong ties to Washington.

A hasty American withdrawal would leave Iraqi security forces much less capable of battling al-Qaeda in Iraq, Iran, or Shia militias aligned with Iran, which would exploit the government’s inability to protect civilians to pose as the protectors of Iraq’s Shia majority. A sudden cutoff of U.S. military support would leave Iraq much more vulnerable to terrorism, sectarian conflict, and Iranian meddling.

Senator John McCain (R–AZ), the ranking Republican on the Senate Armed Services Committee, charged that the Obama Administration had “terribly mishandled” the negations with the Iraqi government and warned that a total U.S. pullout would raise the risks of renewed insurgency and Iranian subversion in Iraq. Last month, similar concerns prompted 42 conservative foreign policy experts to write an open letter to President Obama calling for maintaining a robust U.S. military presence in Iraq.

With the withdrawal deadline fast approaching, the Obama Administration’s negotiations with Iraq appear to be floundering. Unfortunately, too many Iraqi leaders may have already written off the Administration as a reliable ally and are unwilling to take political risks to publicly support strong ties with the United States. This, unfortunately, is another negative side effect of the Obama Doctrine, which calls for diplomatic engagement with America’s enemies—including Iran—sometimes at the expense of America’s friends.

If the Administration cannot salvage the negotiations, Iraq’s stability is likely to deteriorate, offering greater opportunities for Iran and al-Qaeda to expand their influence in a pivotal Middle Eastern state.