Iraq is getting very, very tense. Despite the public assurances of Bush that the Iraqi people have stepped back from the abyss of civil war, the administration is in a near panic.

Iraq’s main political blocs met for the first time in two weeks, signaling a new sense of urgency in talks to form a government. The leaders had been mired in rancorous negotiations over a candidate for the office of prime minister and had failed to come together in one room. But at the urging of the American ambassador, the leaders convened in the fortified Green Zone this afternoon and promptly decided to move up the date of the first session of Parliament to March 16 from March 19.

The ambassador, Zalmay Khalilzad, appeared with the Iraqi politicians in an outdoor news conference afterward and gave an unusually blunt assessment of the state of the country.

“I think the situation is such that there’s a degree of vacuum in authority,” he said. “The need on an urgent basis to form a government of national unity is there.”

And it was right after this meeting that all hell broke loose….again.

Two car bombs exploded at dusk today in separate crowded markets in a Shiite area of eastern Baghdad, killing at least 35 people and injuring scores of others, and spurring Shiite militiamen with Kalashnikov rifles to take to the streets.

The explosions, which were followed by a barrage of rocket fire, were the most explicit attempt to incite sectarian violence since the bombing of a revered Shiite shrine last month.

The blasts set vehicles aflame in the Sadr City neighborhood of Baghdad and scattered body parts across city blocks. In the gathering darkness, with ambulances wailing through the streets, militiamen loyal to the firebrand Shiite cleric Moktada al-Sadr raced among the debris and set up checkpoints in the area.

The scene was similar to the aftermath of the Askariya Shrine bombing in Samarra on Feb. 22, when militiamen streamed out of Sadr City and organized mobs to attack Sunni mosques in eastern Baghdad, leaving hundreds dead and pushing Iraq to the edge of all-out civil war.

He hasn’t weighed in yet. But keep your eye on Juan Cole for updates. The big issue right now is over Ibrahim al-Jaafari, the current prime minister, who has been nominated by the Shiite bloc to maintain that post. He is unacceptable to both the Sunnis and the Kurds, and to a majority of secular Iraqis. In fact, he only won the nomination within the Shiite Bloc by one vote. So, he is not all that popular even with them.

It looks like events are spiraling out of control and all Iraqis are going to suffer the consequences.