Congratulations were in order last Friday for Iraq, which set the world’s record for the longest stretch of parliamentary statehood without an actual government. Dutch politicians took 208 days to form a government in 1977, a period of political log-jamming that Iraqi politicians not only surpassed this past week but will likely dwarf once they finally assemble a ruling coalition in Baghdad.

Apparently satisfied with having achieved this disreputable honor, however, a significant bloc of Iraqi politicians celebrated by taking the first steps to break their stalemate and ultimately produce a functioning government. On Friday, followers of Shiite firebrand Moqtada al-Sadr dropped their longstanding opposition to Nouri al-Maliki’s bid for a second term as Iraqi prime minister. This unexpected development—undoubtedly the product of behind-the-scenes horse trading between Shiite political factions—seemed to shock flat-lined Iraqi politics back to life. The following day, Kurdish lawmakers signaled willingness to align with the would-be premier, a move that would firmly give al-Maliki the majority support needed to form a functioning coalition government.

This is good news, of a sort.

Iraq needs a working government, and quick. While lawmakers in Baghdad continue practicing petty kabuki politics with little regard for the broader public, ordinary Iraqis suffer from a dearth of basic public services, a decimated infrastructure, deteriorating security, and a broken economy. Understandably, Iraqi faith in democracy has worn thin, and regional neighbors grow increasingly wary of the country’s political vacuum. Whatever the merits of al-Maliki’s potential stewardship of the Iraqi state, a functioning government will at least stop the bleeding.

But the news highlights the problems that still lie ahead. The most immediate challenge will be roadblocks thrown up by the Sunni opposition. Of central concern is former prime minister Ayad Allawi’s al-Iraqiya party, a self-professed secular organization that enjoys widespread Sunni support. Al-Iraqiya captured the most seats outright in the country’s March election but failed to build on its electoral gains by establishing a governing coalition. Allawi and his followers refuse to accept al-Maliki’s return to the executive and have signaled their intention to boycott any government with al-Maliki at its head.

If Allawi and his Sunni bloc simply refuse to participate, as some experts fear, the prospect of increased political violence will present itself. On Sunday, a leading Sunni politician, Atheel al-Nujaifi, told the Associated Press that al-Maliki’s reinstatement as prime minister would mark dictatorship’s defeat of democracy in Iraq. Pointing to the possibility of Sunni refusal at the local level to carry out decisions emanating from Baghdad, al-Nujaifi predicted that this state of affairs “could lead to government institutions ceasing to work—they just won’t function anymore,” but added that the resumption of sectarian violence is unlikely. “People are really tired of that kind of thing.” Still, the resurgence of Al Qaeda in Mesopotamia, which has brutally reasserted itself over the past few months by exploiting political and economic frustrations, compounds concern of Sunni disenfranchisement.

But the longer-term sticking point in establishing a secure framework for governance could come from the Kurdish north. Smelling the opportunity to play kingmaker in whatever coalition government moves forward, the Kurds made plain their intention to marry al-Maliki’s fledgling premiership to a series of potentially explosive demands. Chief among them, the Kurds will look to reinstall Jalal Talabani in the presidency, push for greater autonomy over the country’s oil-rich north and assume formal control of the disputed territory in and around the northern city of Kirkuk —traditionally a graveyard for political negotiations in Baghdad. The Kurds may budge on Talabani but are less likely to soften on concessions concerning oil and have ruled out, at least publicly, accepting anything less than a constitutional mandated referendum on the future of Kirkuk.

Meanwhile, the internal dynamics of Iraqi politics have kicked off a diplomatic proxy war between the country’s neighbors, and frustrated the political calculus of American withdrawal. Thus far, Iran looks to be the big winner. Widely believed to have had a hand in convincing al-Sadr to throw his weight behind al-Maliki, Tehran can expect to enjoy considerable influence over a united Shiite front in Baghdad. At the same time, Allawi’s possible sidelining would further hobble the interests of Saudi Arabia and other regional Sunni powers in Iraq.

But without a doubt, developments over the weekend tag Washington as the biggest loser. On the one hand, tolerating the legitimate presence of al-Sadr—who is responsible for the considerable bloodletting of American troops—in a collation government will be a difficult pill for the Obama administration to swallow. On the other, the marginalization of Allawi threatens to further exacerbate Iraq’s fragile security conditions, and preemptively discredits American claims to leaving behind functioning democratic institutions in the wake of withdrawal. It will be interesting to see whether Washington, which up to this point has largely kept its hands off Iraq’s political stalemate, will continue resisting the impulse to do so.

All totaled, the good news of progress in Baghdad will produce, necessarily, more frustration in the short term. Even if al-Maliki takes control of the rudder and successfully steers the country through these choppy waters, it will be months before anything meaningfully coalesces. The International Crisis Group’s Joost Hiltermann warned the New York Times on Saturday not to “expect a government before January.” Given the myriad tensions in need of resolution, however, even this disheartening forecast may prove prematurely optimistic.

Michael Busch, a Foreign Policy In Focus contributor, teaches international relations at the City College of New York and serves as research associate at the Ralph Bunche Institute for International Studies. He is currently working on a doctorate in political science at the Graduate Center, City University of New York.