By Maher Chmaytelli

BAGHDAD (Reuters) - Iraqi Prime Minister Haider al-Abadi expects two victories from the battle underway in Falluja, an Islamic States stronghold near Baghdad. The first is over IS, the second over political rivals, including some backed by Iran.

Retaking Falluja before parliament returns from Ramadan in mid-July would enable Abadi to consolidate his leadership, allies and political analysts said.

It would also clear the path for the Iraqi army to march on the northern city of Mosul, with a view to capturing Islamic State’s Iraqi 'capital' this year.

A prolonged battle for Falluja on the other hand would erode Abadi's ability to end a political crisis over measures to fight graft. This would open the way for rivals to challenge his rule - and delay the U.S-backed campaign to defeat Islamic State.

"The stakes are high for the prime minister and for the campaign on Daesh (Islamic State)," said Baghdad-based security analyst Hisham al-Hashimi.

"There is an undeclared deadline by which he needs to finish with Falluja, and that’s when parliament reconvenes," said Hashimi, the author of the book "The World of Daesh."

His assessment was shared by a senior government official who spoke to Reuters in Baghdad. 

The battle that Abadi started in Falluja on May 23 has allowed him to shift the focus domestically away from a crisis that unfolded when he failed to push through a cabinet reshuffle he sought as part of his drive to fight corruption.

Abadi, a moderate Shi'ite politician, was elected two years ago on promises to curb corruption, defeat IS and to mend a rift with the Sunni minority.

Demonstrations held in support of his reforms by followers of Shi’ite cleric Moqtada al-Sadr turned violent. Since April, protesters have twice stormed the Green Zone district that houses government offices, parliament and embassies.

"Instead of fighting in the Green Zone, he (Abadi) chose to fight in Falluja," said Hassan Hassan, the author of the book "ISIS: inside the Army of Terror".


The fear, Hassan said, is that a stalled battle in Falluja will undermine the battle for Mosul or take a sectarian turn with the involvement of Shi’ite militias.

The collapse of the Iraqi army when IS pushed into Mosul in June 2014 left Abadi reliant for ground troops on Shi’ite militias, known as Hashid Shaabi, or Popular Mobilization. These were trained and influenced by Iran.

But as the army has gained strength over the past year, it has led offensives on the insurgents, recapturing Ramadi, the capital of Sunni Anbar province, west of Baghdad.

Shi'ite militias resent seeing their role diminished.

The government official said the battle inside the city of Falluja had been assigned to elite army units, with Sunni tribal fighters following behind to hold the ground.

The Hashid, he said, should stay on the outskirts enforcing the encirclement and as back up.

Abadi has been keen to defuse sectarian tension as Sunni politicians have voiced alarm that the Shi’ite militias would seek to settle scores with the population of the city.

    He has pledged to punish those who commit "violations" against civilians. He said the offensive had slowed down to protect those who remained in the city, estimated by the United Nations at 90,000.

The United Nations said on Tuesday said there were "extremely distressing, credible reports" of men and boys executed and abused after fleeing Falluja into territory controlled by government forces and their Shi’ite militia allies.

People who managed to escape said they lived on stale dates for months as they could no longer afford to buy supplies under insurgent control. Between 500 and 700 fighters are in Falluja, according to a U.S. military estimate. The Shi’ite militias say their number is closer to 2,500.

Abadi is trying to stay the course in his policy of building bridges with Iraq's Sunnis and Sunni Arab neighboring states. He is trying to distance Baghad from the struggle for regional supremacy between Shi'ite Iran and Sunni Saudi Arabia.

After Iranian Major General Qassem Soleimani, the commander of the Quds Brigade, showed up near Falluja visiting Iraqi allies, for example, Abadi sent ministers on a tour of Arab nations to allay their concern.

Foreign Minister Ibrahim al-Jaafari, a Shi'ite, visited Cairo and Amman with a senior Iraqi Sunni cleric, Abdul Latif Humayim, in a show of national unity.

(editing by Janet McBride)