FACTBOX: Challenges facing Iraq 5 years after U.S. invasion

(Reuters) - Following are some of the challenges Iraqi Shi'ite Prime Minister Nuri al-Maliki faces, five years after the U.S.-led invasion toppled Saddam Hussein.

* SECURITY

-- Violence is down 60 percent since last June, but the U.S. military commander in Iraq, General David Petraeus, says the security gains are fragile and easily reversed. Some 20,000 extra U.S. troops that were sent to Iraq in 2007 to help curb sectarian violence will be withdrawn by July. With a smaller U.S. military operational footprint, the test now will be whether Iraq's security forces can hold on to those gains.

* ECONOMY

-- The International Monetary Fund expects higher oil output to push Iraq's gross domestic product up to over 7 percent this year, from just 1.3 percent in 2007. But there is still high unemployment and little inward investment, and the United Nations estimates that 4 million Iraqis are struggling to feed themselves while 40 percent of the country's 27 million people have no safe water.

* SUNNI ARAB INSURGENCY

-- The Sunni Arab insurgency against Maliki's government has waned sharply after Sunni Arab tribes and some nationalist insurgent groups joined so-called Awakening Councils last year and took up arms against Sunni Islamist al Qaeda, a resilient enemy that the U.S. military calls the greatest threat to peace in Iraq. Despite being largely driven from Baghdad and western Anbar province, al Qaeda militants have regrouped in the north and continue to stage large-scale suicide bombings.

* CONCERNED LOCAL CITIZENS

-- Maliki's Shi'ite-led government has kept at arm's length concerned local citizen groups, mainly Sunni Arab men tasked by the U.S. military to man checkpoints and guard residential areas. Analysts warn that the groups -- which include former insurgents -- could rebel against the government if it does not do more to incorporate them into its security forces or give them other jobs. So far, it has agreed to integrate about 20 percent of the 80,000 volunteers into the police force.