Two victories in a single month. Amid the encircling economic gloom, it's hard to believe we deserve such good news. First, of course, Barack Obama's election win. And now Iraq's unexpected deal with the American government for the occupation to end at last.

Debated by the Iraqi parliament today, the agreement has been virtually ignored in many left-liberal circles as well as by most of the mainstream American media. We are so inured to thinking that the US will always get its way in Iraq, thanks to its enormous investment of troops and treasure, that any potentially contrary development is dismissed. The US has agreed to leave Iraq. "You must be joking," comes the response. "Why would they build 14 mega-bases if they didn't intend to stay for decades?" The US is allowing Iraqi courts jurisdiction over crimes committed by American troops. "Give me a break. You can't believe that," I hear the sneer.

Well, look at the agreement's text. It is remarkable for the number and scope of the concessions that the Iraqi government has managed to get from the Bush administration. They amount to a series of U-turns that spell the complete defeat of the neoconservative plan to turn Iraq into a pro-western ally and a platform from which to project US power across the Middle East.

The title gives the game away - Agreement on the Withdrawal of United States Forces from Iraq and the Organisation of Their Activities during Their Temporary Presence in Iraq. Remember how Bush (and his ally, Gordon Brown) constantly rejected any "artificial timetables" for pulling out the troops. Everything had to be "conditions-based", meaning that no dates could be given in advance since all depended on whether Iraq's own forces were ready to fill the gap. It was an elastic formula that allowed Washington to delay a withdrawal for ever.

That has gone by the board. The agreement stipulates that "all US forces shall withdraw from all Iraqi territory no later than December 31 2011". More remarkably, all combat troops will leave Iraqi towns and villages and go back to base by the end of June next year. Pause for a moment and take that in. Six years and three months after the invasion, Iraqi streets will be a US-free zone again.

Iraq will have a veto over all US military operations. A clause added at the last minute after pressure from Iran says that Iraqi land, sea and air may not be used as a launch pad or transit point for attacks on other countries. The Iraqi government eagerly took up the point after US helicopters flew into Syria and attacked a compound there last month, claiming it was a base from which foreign fighters entered Iraq. Iraq joined Syria in protesting against the raid.

Under the withdrawal agreement, no Iraqi can be arrested by US forces except with permission from Iraqi authorities, and every Iraqi who is arrested in these circumstances must be handed to Iraqi forces within 24 hours. The tens of thousands of detainees in US custody must either be released or turned over to the Iraqis immediately. US troops may not enter or search any Iraqi house without an Iraqi judge's warrant, except if they are conducting a joint combat operation with the Iraqi military.

US contractors - the armed mercenaries in their SUVs whom Iraqis hate even more than the American military - will lose their immunity and be subject to Iraqi law, a development that is already prompting many security firms to start pulling out. US troops who rape Iraqi women or commit any other crime while off duty and off base will have to stand trial in Iraqi courts.

The deal gives Iraq's national resistance almost everything it fought for. How did Nouri al-Maliki's government achieve it? The main reason is that Iraqi nationalism and the occupation's unpopularity have become overwhelming. Opinion polls have long shown that a majority of Iraqis wanted the occupation to end. They found it humiliating and oppressive. Al-Qaida's infiltration, and the sectarian conflict which its supporters and recruits successfully provoked in 2006 and 2007, distracted many Iraqis for a time. Some saw the US as the lesser enemy. But al-Qaida's power has waned thanks to the Awakening movement of Sunni tribal leaders; and the primary issue, the US intervention, has returned to centre stage. Nationalist sentiment, articulated from the first weeks of the occupation by Sunni insurgents (many of whom later joined the Awakening movement) as well as Moqtada al-Sadr's Shia militia, has spread through the country's ruling elite. This summer Prime Minister Maliki began to realise that he had more to gain by posing as the man who achieved a US withdrawal than by trying to block it. It is a triumph for Iraq.

There are caveats. US forces need not leave for three years, a point which troubles many in the Iraqi parliament which is scheduled to vote on it today. The Sadrists oppose the agreement largely for that reason. Under pressure from their leading imam, the main Sunni block called for a referendum. Maliki has conceded the point, though the pact will come into force and only lapse if voters turn it down next year. Now the Sunnis are adding new demands.

Obama's position is compatible with the pact, and his staff approved it before the Bush team signed. The president-elect wants US combat troops out of Iraq by May 2010, well before the pact's deadline. The joker in Obama's policy is his call for a "residual force" to stay to fight al-Qaida and carry on training Iraqis. The pact allows some US forces to remain, but only after joint "strategic deliberations" in the event of an external or internal threat. As for training, there has to be a separate US-Iraqi agreement.

From the American point of view, the main thing the pact does is to allow the US to withdraw with dignity. No hasty Vietnam-style humiliation, but an orderly retreat from an adventure which was illegal, unnecessary, and a disaster from the moment of conception. Like most Iraqis, I am content with that. American neoconservatives will declare victory, as Frederick Kagan, one of the architects of the "surge", did this week. But the fact is that Bush and his ideologues wanted to make Iraq a protectorate and stay indefinitely so as to intimidate Iran and Syria. Now they have been forced to give up, and a newly confident Tehran has been helping its neighbouring Shia-led government in Baghdad to show them the door.