By Anna Ringstrom and Susan Cornwell
U.N. Secretary-General Ban Ki-moon and Iraqi Prime Minister Nuri al-Maliki will chair the conference on Thursday, aimed at assessing progress in implementing a plan adopted at a meeting in Egypt last year to help Iraq rebuild after five years of war.
Analysts are watching for any contacts between Secretary of State Condoleezza Rice and her Iranian counterpart, Manouchehr Mottaki, who will be attending the meeting, though U.S. officials say none are scheduled in Stockholm.
"If we don't get it right in Iraq, if we leave Iraq prematurely, then we're going to empower Iran," Rice said on Friday in an interview with CNBC's "Closing Bell with Maria Bartiromo.
"We're getting exactly what we had hoped: the emergence of a functioning government in Iraq that is making strides towards democracy and reconciliation, that is providing better security for its people, that is beginning to be integrated again into the region," she added.
Washington accuses Tehran of trying to destabilize the Shi'ite-led Iraqi government by training and arming local militias, a charge Iran denies.
The United States has been pressing Sunni Arab governments to shore up the government of Nuri al-Maliki by forgiving debts and opening diplomatic missions.
No ambassador from any Sunni-led Arab nation has been stationed permanently in Baghdad since 2005. The Sunni-led Arab governments cite security concerns.
VIOLENCE IS DOWN
Figures by the U.S. military released on Saturday indicated that violence in Iraq has fallen to its lowest level in more than four years, though officials say the progress is still reversible.
Analysts say the Iraqi government's reliance on the U.S. and other foreign troops and perceived collusion by the Shi'ite-led Iraqi government with fellow-Shi'ite Iran may also lie behind the reluctance to normalize ties.
Saudi Arabia wants the Maliki government to reach out to the Sunni Muslim minority politically. The main Sunni Arab political bloc quit the national unity government last August, demanding the release of prisoners and more say on security.
Ekaterina Stepanova, project leader at the Armed Conflicts and Conflict Management Program at the Stockholm International Peace Research Institute, said it would take a more representative Iraqi government for Arab neighbors to strengthen ties with the country.
"Any lasting solution to this endemic problem of state weakness in Iraq would require full, not just symbolic, Sunni political participation in the government," Stepanova said.
The Maliki government has committed to economic and political reforms under the International Compact with Iraq process, which aims at increasing the international engagement in the reconstruction of Iraq.
The commitments are the quid pro quo for support that the international community has in return committed to.
"Clearly this kind of meeting has some potential but it probably should not be overstated," said Rick Barton, a senior adviser at the Center for Strategic and International Studies in Washington, adding debt relief and distribution of oil funds would be high on the agenda.
(Editing by Sami Aboudi)
