So there has indeed been a granting of "sovereignty," even if in the air, so to speak, not on the ground. The Europeans, always ready in the end to give way before Washington, offered a g-string worth of cover at the UN; the Russians had other fish to fry; and the Chinese were undoubtedly clapping their hands, Iraq being the windfall of all times for them. (After all, before the Middle East trumped Asian policy, China stood a reasonable chance of being slotted in as the Enemy of Enemies of the Bush administration's dreams.)
http://www.nationinstitute.org/tomdispatch/index.mhtml?pid=1500

It was the CIA which finally established "sovereignty," destroying, at least for the time being, former exile Ahmed Chalabi, the Pentagon's man in Iraq and head of the Iraqi National Congress, and replacing him with exile Iyad Allawi, their own long-time man and head of the Iraqi National Accord, who is now prime minister of the country. So instead of a neocon administration in Baghdad, we have a CIA one; or put another way, instead of conferring sovereignty on an accused con artist and notorious liar, who reputedly defrauded a Jordanian bank of millions and seems to have stolen reality itself from the Pentagon civilian leadership, the Bush administration conferred it on the head of a former terrorist organization, which committed car bombings in downtown Baghdad back in the days of Saddam Hussein.

The only small problem with the whole discussion of sovereignty, of course, lies in recalcitrant Iraq which is now so darn sovereign that the Pentagon is madly figuring how to: withdraw troops from far-flung garrisons elsewhere on this small planet to reinforce our now-no-longer-occupying army of 138,000 in Iraq; extend the terms of duty of troops assigned to Iraq, despite contracts for the "volunteer" Army that say otherwise; and further bolster and coordinate the mercenary army of private "contractors" already there. This reflects the confidence the U.S. military has in the "sovereign" powers of the new Iraqi regime.

But even under these circumstances, the command of Iraqi armed forces by Iraqi officers appointed by the new government remains purely symbolic. Left unmentioned in the UN debate was the modest size of the military (35,000 soldiers when fully trained) and its light armament (no tanks or air power) compared to the American forces. Left unmentioned as well was the fact that the United States will be in charge of recruiting, training and supplying all Iraqi forces, both military and police. Left unmentioned as well was the fact that the entirety of the budget for those armed forces and police will come from the Pentagon's military budget. The significance of these sinews of control was not lost on American administrators, who told New York Times reporters John F. Burns and Thom Shanker that if there was ever disagreement over military policy, ''The American commander would only have to say, 'O.K., we're out of here,' and the Iraqis would back down.''