As noted in comments here, T. M. Lutas says that the Democrats’ bet is looking pretty shaky:

I expect at least 3 more provinces to get handed over between now and the height of campaign season 2008. I’d like to think that at least 6 more would make the transition by then (obviating the need to explain Kurdistan’s special situation in the stats). The defeatists have to change the natural progression of Iraqi government and security institution building and do it soon or they’re going to be in deep trouble in 2008.