Washington has oversold the significance of the June 30 handover and must now work to give substance to this symbolic step. Our problem is that the Iraqi people still perceive little improvement in their personal lives and no end to violence in their country. Abu Musab Zarqawi, al Qaeda's leading associate in Iraq, months ago advocated sparking a Sunni-Shiite civil war before July 1. We can assume that he and his followers will continue to decry the American occupation and, now, the "American transitional government."

The new Iraqi government is not all that new. Some of its leaders have been on the U.S.-appointed interim Governing Council for the past year. The Bush administration's biggest challenge will be to help the incoming government gain credibility while convincing Iraqis that it represents real change and a meaningful step toward an Iraq under Iraqi control. We and the Iraqi leadership face the same enemies. We need to persuade the public to recognize this fact and deny these common enemies support and cover.

The new government will be in a tough position. While it is bound to make mistakes, we can tolerate any missteps as long as they do not threaten American lives. Iraqi authorities will have to be seen as thrusting their fingers in our eye at times. Not only should we let them do this, we should lean over backward to defer to Iraqi decision-makers. Ambassador John D. Negroponte will be sensitive to that need.

But no matter how skillful his approach, it will be apparent to all that the Iraqi government will remain heavily and publicly dependent on us. Under the terms of the handover, the United States will continue to have responsibility for improving Iraqi national security and reviving the country's economy.

Every U.S. action, even the most logical, will be scrutinized by the Iraqi people for evidence of whether we are willing to let them go their own way. That's why it's so important that we resolve the question of what to do with Saddam Hussein. Yes, there are practical problems with turning him over. But symbolically, there are even greater repercussions if our reluctance to give him up sends the message that we don't trust the new government.

Our strategy in the months ahead should be to reduce the number of confrontations between our military and Iraqi citizens. But let us avoid wishful thinking. July 1 will not mark a night-and-day difference in the capabilities of the Iraqi police and military. They will need rigorous training for several more months to ensure law and order in central and southern Iraq.

Perhaps Fallujah, where we turned over security responsibilities to an Iraqi force, will become the model for Baghdad and other troubled centers. But that's not likely. Fallujah is reportedly being used as a refuge and training center for dissidents, both domestic and foreign, who are dedicated to violence.

Financially, the transitional government will remain about as dependent on U.S. funding as it has been since the war. Washington's projections of Iraqi oil production were too optimistic, while saboteurs have kept that and other industries' sensitive installations, including power plants, in their gun sights. This will seriously affect public morale and national productivity during the summer's searing heat. Jobs are still scarce and too few Iraqis yet feel they have a stake in their country's future after July 1. By undertaking several major public works programs -- without abandoning more carefully-planned infrastructure projects -- the new government could demonstrate that it can create opportunity with the help of its American partner.

Our handling of the next phase in Iraq will take place against the backdrop of a region in turmoil. The Middle East peace process is moribund, and Saudi Arabia faces troubling domestic challenges. Whatever we can do to make progress on those fronts will help us in Iraq. Our choice in the region is not between being loved or being respected. At the moment we are neither. Ties with traditional allies have been strained. Friends and adversaries alike see us as bogged down in Iraq.

Above all, we should remember that the new government's principal mission is to put an Iraqi face on decision-making as it prepares the country for national elections. It is not to serve as our laboratory test case for a "Made in America" vision of political transformation. The time frame we have set for elections is too short to allow for experiments.

Author's e-mail: rmurphy@cfr.org

Richard W. Murphy served as assistant secretary of state for Near Eastern and South Asian affairs in the Reagan administration, and as U.S. ambassador to Syria and Saudi Arabia.