US Secretary of State Condoleezza Rice has signed an agreement giving the Palestinian Authority $80m (£39m) to reform their security services.

It was described as a “powder keg” moment. In late May, just across the Tigris river from Baghdad’s fortified Green Zone, a heavily armed convoy of American forces was driving down a street near the Iraqi Interior Ministry.

Iraq’s parliament went into summer recess for a month on Monday after political leaders failed to agree on a series of laws that Washington sees as crucial to stabilizing the country.