2nd July: Iraqi Parliament got delayed when Najiba Najib, a Kurdish lawmaker, asked that dfederal funds withheld from Kurdistan be released. This was asked when the speaker was being decided. This angered Kadhim Al Sayadi of the state of the law coalition who responded by threatening to crush the Kurds in their bid for independence. Sunni MPs left when mention of the DI of Daash was made. Most of the Sunni and Kurdish MPs did not return after the interval.
2nd July: The clashes in Karbala have reported to have started when the local police tried to remove concrete barriers installed around cleric Hasan al-Sharkhi’s office in Saif Saad neighborhood south of the city. The police were confronted by the supporters of the cleric and on ignoring their protests were shot at. Two policemen were then killed. The police returned fire. Supporters then spread out in Karbala and armed reinforcements were sent from Najaf by Maliki. The police later arrested over 100 followers of the cleric. The cleric is reported to have fled.
2nd July: Massoud Barzani has met with the head of the opposition Syrian National Coalition, Ahmed al-Jarba, on Wednesday.
3rd July: Supporters gather outside the Kurdish Parliament in Kurdistan in support of Barzani’s call for a referendum. Kurdish authorities are insisting that they will go ahead with their bid for independence with or without “American” approval. Massoud Barzani has arrived at the Kurdish parliament and is expected to give a speech shortly. Latest: Barzani calls for independence.
3rd July: State of Law coalition, which is headed by Nouri Al Maliki, has stated that it will not allow Osama Al-Nujaifi to occupy any of the three presidencies (President, Prime Minister, Speaker) and that alternatives should be considered. Their spokesperson, Mohammed al-Sayhood, stated “our belief is that Nujaifi has failed the political process in Iraq.”
Nujaifi’s party, the Motahedoun, has rejected the candidacy of Maliki and has asked the National Coalition to propose some other candidate.
3rd July: Ibrahim al-Jaafari, the head of the National Alliance meets with members of the National Coalition to discuss government formation.
3rd July: US adds to pressure, state department spokesperson, Marie Harf, “time is not on Iraq’s side” when referring to law makers adjourning parliament.
3rd July: America’s 300 give their first assessment of Iraqi forces: Iran is doubling its efforts to train Shiite militias. The Baghdad airport is ill prepared with only eight apache gunships.
3rd July: Turkoman refugee families in Iraqi Kurdistan have had their movements restricted to the camps. Those wanting to travel to the south of Iraq are finding it impossible on account of the roads being held by Daash. The airport and the entire city of Erbil have been put off limits by Kurdish authorities.
3rd July: Saudi news channel Al-Arabiya claims that the Iraqi army withdraws its patrols and forces from the Iraq Saudi Border in the province of Karbal, forcing the Saudi army to deploy 30000 troops along the border. The claims are later denied by the Iraqi Army.
3rd July: Daash has released 32 Turkish drivers it had abducted in the beginning of June. They are now with Turkish authorities in northern Iraq.
3rd July Shannon Maureen Conley, a 19 year old American is arrested in Colorado while trying to board a flight to Germany. She was on her way to fight for Daash in Syria. She is being interrogated by the FBI.
3rd July: An IED has exploded in the south west of Kirkuk city killing one Peshmerga fighter and injuring another five. Iraqi government aircraft have targeted Daash fuel tankers that were loading fuel in Al-Safra village south of Kirkuk. The airstrike destroyed three tankers and damaged six.
3rd July: Peshmerga fighters clash with Daash militants in Jalawalaa district, north east Baqouba. Casualties are being reported amongst the Daash fighters.
3rd July: Atta/Government claims for the day:
Some areas of Jurf al-Sakhar district in Babel province have been cleared of Daash fighters/Rebels
The air force has bombed the Mayor’s building in Shurqat, Salahuddin province
Abu al-Oula al-Shami, a Daash commander responsible for recruiting, has been killed by Security Forces in Anbar

Related:
2nd July: An EU court has scrapped sanctions that were imposed by the EU on the Sharif University. The University was placed under sanctions for supporting Iran’s nuclear program. The sanctions were scrapped for lack of evidence.
3rd July: Iran and P5 enter final stages of the Iranian nuclear negotiations.
3rd July: Sunni Bangladeshi migrant workers returning from Iraq complain of being beaten, insulted and their cleric tortured by Iraqi Security Forces for being pro rebel/Daash. The 21 labourers said that the abuse had been widespread. One laborer was allegedly stripped naked, those with long beards were singled out for abuse.
3rd July: Obama talks to the Saudi King Abdullah about the security situation in Iraq. The Saudi king offers 500 million USD aid to those displaced in the fighting. The money will be channeled through the UN (and not the regular Daash channels).
3rd July: Zahran Alloush, head of the Syrian Islamist militant group Jaish al Islam (Army of Islam) is seriously injured in a suburb of Damascus when a meeting of his fighters was struck by mortar shells fired by Daash fighters. He had earlier referred to the Daash in a YouTube video as being “Kharjities” and destroyers of Jihad.

Short Analysis:
The Telegraph, UK, today stated the glaringly obvious. The only asset the Americans did not supply the Iraqi leadership with was air power. It states that even a rudimentary air force of Second World War aircraft would have prevented Daash from making rapid advances corroborating what Maliki had claimed earlier. It also goes on to state that the F-16s promised would have been ill suited for ground attack missions.
The inability of the Iraqi forces to stop the Daash/rebel advance on the roads, is now forcing them to fight a costly, in terms of men and money, urban confrontation.
Osama al Nujaifi today claimed that “he had received confirmation from the U.S. Vice President Joe Biden on the ‘need for change’ in the country. Maliki is now the past.” He also justified the Kurdish call for independence by referring to it as an outcome of the “marginalization” policies of the government in Baghdad, which as the speaker of Parliament, he was part of.

Further reading:
Must watch, Shia militias trained in Syria fighting in Iraq
http://edition.cnn.com/video/data/2.0/video/world/2014/07/02/pkg-damon-iraq-shrine-militia.cnn.html
Video by BBC on the mobilization of Shia militias in Baghdad
http://www.bbc.com/news/world-middle-east-28142802
Bhadrakumar’s piece; Iran’s efforts to fight Daash and spot the odd man out:
http://blogs.rediff.com/mkbhadrakumar/2014/07/01/iran-preparing-to-vanquish-isil/