Salman Khaled has already lived through Baghdad's sectarian disintegration; with Iraq now splintering into Shi'ite, Sunni Arab and Kurdish regions, he says this time the survival of the country is at stake.

"Things are really tense and it could get worse," said the 23-year-old Sunni Muslim student. "If the politicians continue as they are doing now, we are on the path to separation."

When Khaled's father was shot dead by Shi'ite gunmen at the height of Baghdad's religious bloodshed seven years ago, his family took shelter in a Sunni neighbourhood of the capital.

They made their flight as violence forced apart communities that once mingled in the city. Today the family lives in the Adhamiya district, close to the Abu Hanifa mosque where one of Sunni Islam's most influential theologians is buried.

At his home on an unpaved street, Khaled says he still feels secure in Adhamiya but he rarely goes to the rest of Baghdad where blast walls and security checkpoints hint at the fate of a fractured Iraq.

Iraq's latest - and gravest - crisis erupted when mostly Sunni fighters swept through the north last month. Now the jihadist black flag flies over most of the country's Sunni Arab territory.

Kurdish forces, exploiting the chance to take another step towards independence, seized the city of Kirkuk and nearby oilfields, leaving the Shi'ite-led government controlling only the capital region and the mainly Shi'ite south.

The government is trying to reverse this de facto, three-way split of the country, but its reliance on Shi'ite militia and volunteers rather than the ineffectual national army has deepened sectarian mistrust without pushing the rebels back.

Across Baghdad a Sunni living in the Shi'ite area of Maalef, cut off from the rest of the city by a checkpoint where non-residents are turned back, said life there had become unbearable for those who do not belong to the majority Shi'ite community.

"The Sunnis all want separation now," said the 37-year-old electrician, who asked not to be named for his security. "Facts on the ground tell you this will be the final result. On both sides now you have extremists who don't want to get along".

DIVIDED INTO THREE STATES

Kurdish politician Hoshiyar Zebari, who still staunchly advocates Iraqi unity, described the new geography. "The country is divided literally into three states: the Kurdish state; the black state (under Sunni insurgents) and Baghdad," he said.

Iraq's political elite and world powers have concentrated on the formation of a new government as the best way to save the country, but such a push may come too late.

"It's probably the most serious crisis that Iraq has faced since its inception as a country," said Ali Allawi, a minister in two governments after the US-led invasion that toppled Saddam Hussein in 2003. "It's the first time that the territorial integrity of the state as a whole is in question."

This could further destabilise an already tumultuous region. Neighbouring Syria also faces disintegration, with most of its eastern areas under Islamist rebels for more than a year.

Iraq's heritage stretches back to early civilisation on the Tigris and Euphrates rivers, but the modern state is a colonial fusion of the Ottoman provinces of Basra, Baghdad and Mosul that followed the empire's disintegration after World War One.

Sunni and Shi'ite Arabs have little to unite them, Allawi said, while for most Kurds, non-Arabs who were persecuted under Saddam, the idea of an Iraqi nation is even more fanciful.

"Iraq is a failed state," said Masrour Barzani head of the Kurdish region's National Security Council. "It is a fabricated state. It has never been a state by choice by the people or the components of this country. They were forced to live together".

Barzani blamed Baghdad for failing to keep Iraq united, and defended Kurdish aspirations for independence. "I don't think any rational person in the world would expect the Kurds to live and accept being partners in a country with a terrorist organisation," he said, referring to Islamic State militants.

BATTLE LINES ENTRENCHED

The long delay in forming a government after parliamentary elections in April and the eclipse of army units last month by better disciplined and motivated Shi'ite militias have revealed the fragility of national institutions.

In Samarra, 110 km (70 miles) from Baghdad and one of the most northerly cities under government control, a Reuters photographer saw Shi'ite militiamen on patrol rather than army troops.

"We are better than the army because we are fighting for our beliefs," said lawmaker Hakim Zamili, who supervised deployment of the Mahdi Army's "Peace Brigades" militia around Samarra.

The government's inability throughout the first half of 2014 to recapture the Sunni city of Falluja, just 50 km (30 miles) west of Baghdad, from the Islamic State underlines how ill equipped it is to reverse far greater militant gains since then which have displaced more than a million people.

"One possibility is that these territories remain outside government control for a long period of time. That would lead to a sort of de facto partition," said Fanar Haddad, an academic and author on Iraq.

If it is to have any chance of turning the tide, the government must lure minority Sunnis away from the radicals now threatening to encircle Baghdad.

The Islamic State, a relatively small vanguard, has exploited Sunni disgruntlement with Shi'ite Prime Minister Nuri Al-Maliki to assert itself in the predominantly Sunni regions.

Eight years ago when the US army faced a similar challenge from the Islamic State in Iraq - an Al Qaeda group from which the Islamic State emerged - it persuaded Sunni tribal leaders to switch sides, offering millions of dollars as incentive.

This time, that's not an option. Maliki, who distrusted the Sunni paramilitary forces, halted their payments years ago, leaving them embittered and unlikely to fight a second time for the central government.

"Unless Maliki makes some very significant concessions to the Sunni Arabs it will be very difficult to peel them away from the Islamic State," said Robert Ford, a former senior US diplomat and resident scholar at the Washington Institute.

Ford, who served in Baghdad between 2004 and 2006, said the Islamic State's absolutist dogma would lead it eventually into confrontation with its Sunni allies. However, for the time being Sunni factions were united in their opposition to Maliki.

Critics accuse Maliki of marginalising Sunni and Kurdish factions during his eight years in power. Even some fellow Shi'ite politicians oppose granting him a third term although his State of Law emerged as the largest parliamentary list in the April election.

WARRING STATELETS

A US military official who served in Iraq predicted four "warring statelets" could emerge, based around Shi'ite power south of Samarra, Kurdish control in the northeast, and separate Sunni power centres on the Tigris and Euphrates.

Many parts of central Iraq are mixed Sunni and Shi'ite regions, and any such partition would probably leave a million Sunnis in those areas stranded under Shi'ite control.

"Iraq doesn't fall apart easily. There is no such thing as soft partition, because these borders are not clearly defined," said Emma Sky, a British political adviser to the commander of the US-led international forces in Iraq between 2007 and 2010. "Partition of any type requires a horrible level of killing and ethnic cleansing."

Maliki has urged Iraqis to resist moves towards separation, which he said would mark the disintegration of the nation, but many of his critics say he himself is a divisive force.

"This crisis is not about ancient hatreds, it is a massive failure of leadership. And it has been obviously a failure of Western, U.S. policies," Sky said by phone from northern Iraq. "With leadership they can pull this situation round."

Sunni politicians have offered few solutions to the crisis, partly because their own influence is so limited in Sunni regions compared with the Islamic State and tribal fighters'.

The mainly Sunni Arab provinces in the west and north may be eyeing the same autonomy enjoyed by the three Kurdish provinces of the northeast, but even to start negotiations towards such a deal, which Baghdad would almost certainly block, requires "a new political mix" in the capital, Haddad said.

It would also need the defeat of the Islamic State. "We've been hearing about Iraq breaking up and Iraq unravelling since 2003," he said. "But I never thought that Arab Iraq was breaking up. Today I think the prospects for a united Iraq, even if it's just Arab Iraq, are fading quickly." - Reuters