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 But Haider al-Abadi faces a huge challenge forging a common front
against Islamic State fighters, rebuilding an ineffective army and
reasserting a degree of central government authority across Iraq.
Time is short and the battle to contain the militants who control
swathes of territory is draining the country's finances. Millions of
people have been displaced and sectarian anger is growing.
Abadi has responded with a series of steps to improve the
Shi'ite-led government's standing, not just with Iraqi Kurds and
Sunni Arab tribes but also across borders with Gulf neighbors.
His successes include a deal last month with Iraq's autonomous
Kurdish region on oil exports and budget payments, which followed
months of dispute.
He has dismissed dozens of top army and security officers appointed
by former premier Nuri al-Maliki, announced a campaign against
corruption in the military, ordered curbs on arrests without a
judge's authorization, and decreed the speeding up of the release of
detainees when courts order them to be set free.
 "His biggest achievement was his desire for change, to deal with the
mistakes of the last eight years," said former judge and minister
Wael Abdulatif, referring to Maliki's two terms in office.
After Maliki alienated Iraq's Sunnis and Kurds by promoting hardline
Shi'ite interests, Abadi has tried to win over Iraq's Sunni tribes
whose western and northern heartlands have emerged as the core of
Islamic State power. He appointed a Sunni defense minister and has
held talks with Sunni tribal leaders.
The moderate Shi'ite Islamist has also tried to mend fences with
Sunni Arab states across the Gulf, an effort which has not gone
unnoticed in the region.
"What I heard and saw from the prime minister is frankly the
difference between day and night (compared with) what we've known
and what we've heard from the previous prime minister Maliki," said
United Arab Emirates Foreign Minister Abdullah bin Zayed Al Nahayan,
shortly after visiting Baghdad last month.
Regional Sunni power Saudi Arabia is talking, once again, about
reopening its embassy in Baghdad soon.
"DISMANTLING MALIKI'S STATE"
Abadi shocked many Iraqis last month when he said an investigation
had found that at least 50,000 "ghost soldiers" were on the army
payroll, taking salaries without showing up for duty and paying off
officers who let them stay at home.
Promising greater accountability and transparency, he has also said
he will win parliamentary approval for the 2015 budget, unlike this
year's budget which was never endorsed due to acrimony between
Maliki and political parties.
 Like Maliki, 62-year-old Abadi is a veteran member of the Islamist
Dawa Party. This was outlawed under Saddam Hussein and both men fled
the country, returning only after Saddam was toppled in 2003.
But while Maliki spent his exile living between Damascus and Iran
and working for the opposition under an assumed name, Abadi, a
qualified engineer, set up business in Britain where he worked for
more than 20 years.
He projects a pragmatic and business-like approach to governing, in
contrast to the dogmatic and secretive style which critics saw in
Maliki.
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"He's dismantled much of Maliki's state," said a senior Western
diplomat in Baghdad, approvingly. "If you look at the achievements
of this government, it delivers. But it must be given time."
During his term in office, Islamic State forces have been pushed
back from Jurf al-Sakhr south of Baghdad and two towns near the
Iranian border, while the militants' five-month siege of Iraq's
largest oil refinery has been lifted.
But none of the political or military gains is irreversible. The job
of imposing central authority remains, and some believe his momentum
will stall.
"He started off well and he's got the right approach, but a more
positive attitude is not sufficient to put Humpty Dumpty together
again," said Kurdish regional government spokesman Safeen Dizayee,
noting that Abadi may face discontent not just from outside but also
among his own constituents.
That was apparent soon after the Kurdish oil deal was announced when
a delegation from the Shi'ite city of Basra said their southern
region, which produces by far the most of Iraq's oil, should have
some of the same autonomy enjoyed by Kurds.
So far Abadi's overtures to Sunnis in the western province of Anbar,
whose support is vital for any long-lasting drive against Islamic
State, have been met with scepticism from tribal leaders who say
they have received desperately little reinforcement from Baghdad.
Ayham Kamel, an analyst with the Eurasia Group consultancy, said
2014 marked Abadi's political honeymoon, and perhaps the peak of his
limited powers.
Next year could be tougher. After victories against Islamic State in
mixed sectarian regions, Abadi will face pressure to drive home the
offensive in the group's Sunni heartlands.
Continued reliance on Shi'ite militias rather than the army, as well
as dependence on U.S.-led air support, highlights the weakness of
Abadi's state.
"There is still a central government in Baghdad that is nominally in
charge of the country as a whole," Kamel said. "But in real terms
the central government is less relevant in Kurdish areas, it is
irrelevant in the Sunni heartland and it is also less relevant in
the (Shi'ite) south."
(Additional reporting by Isabel Coles in Arbil and Yara Bayoumy in
Dubai, editing by Ned Parker; editing by David Stamp)
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