Last November, Joe Biden who is one of the Presidential candidates offered a new plan for stabilizing Iraq which did call for divided regional authority, but still with a central government:

Iraq: A Way Forward

He recommended federalizing the government and allowing the three religious sects to control their own territories. They would have common interests like border security and the distribution of oil. In Biden's proposal he said: "The plan would bind the Sunnis - who have no oil -- by guaranteeing them a proportionate share of oil revenues." Would the Shia ever agree to such a plan?