Iraq's armed forces collapsed last year when ISIS took control of Mosul and the Sunni Arab north; it remains, by and large, demoralized, incompetent and corrupt.
Since last year, the only effective fighting force, bar the Kurdish Peshmerga, has been Iraq's Shia militias.
If it wants to defeat ISIS, the U.S. must work with these militias, include them in its strategy to defeat the jihadists and help integrate them into a reconstituted Iraqi army.
The notion of working with the militias is something of a double-edged sword.
Iraq's Shia militias were responsible for many atrocities against U.S. forces during their occupation of Iraq. They have American blood on their hands, as well as Iraqi blood.
In tandem with fighting the U.S., they fought a bloody civil war with Iraq's Sunni insurgency, most notably when sectarian warfare reached its apex in 2006.
However, for the time being, it is only Iraq's Shia militias that can inflict heavy blows on ISIS.
Speaking to officials in Iraq last month, it was clear the country's armed forces are yet to recover from their capitulation last year and are still unable to match ISIS' battlefield prowess.
Iraq's Shia militias, on the other hand, honed their skills against U.S. forces and Iraq's Sunni militants. They forced Sunni militants into retreat after the 2006 civil war, preserving the post-2003 political order and preventing Baathists from returning to power.
These militias are battle-hardened, experienced and have fought jihadists in Syria.
Just as they have helped turn the tide against Syria's Islamist rebels, they have proven invaluable in guaranteeing the survival of the Iraqi state.
When Mosul collapsed last year and Baghdad was threatened, few argued against deploying these militias.
What compounds the dilemma facing U.S. policymakers is that some of Iraq's Shia militias have links to Iran and have carried out attacks on U.S. forces, on the orders of Tehran.
Iran gave Iraq's Shia militias substantial support when Mosul fell last year, in the effort to secure Baghdad and the Shia south. It sent arms, as well as technical and intelligence support
The notion of working with Shia militias who have American blood on their hands and militias that, in some instances, receive orders from Tehran might seem absurd. But the U.S. has done so before.
After 2003, faced with a resilient Sunni insurgency, U.S. forces fought the insurgents together with Shia militias.
Iraq was secured through a messy effort involving U.S. forces, Shia militias and the Iraqi armed forces.
Whilst the U.S. sometimes worked with the militias indirectly, the picture becomes complicated because members of the army and police, with which the U.S. worked directly, doubled as militias that engaged in targeted sectarian attacks.
The argument that the U.S. cannot work with Iraq's Shia militias becomes further implausible in light of the fact the U.S. has worked with the Sunni insurgency, its most lethal opponent in Iraq that has also received support from the Arab world.
Iraq's Sunni insurgents were welcomed with open arms by the U.S. after 2006, as part of the surge and the Awakening movement, which involved a coalition of Sunni tribes backed by the U.S. to maintain security in their local areas and combat Al Qaeda in Iraq.
Things can be different this time round.
Iraq's Shia militias cannot be eliminated. They are a product of, and operate with the support, of their communities. They are legitimate and indigenous actors that Iraq's Shia community recognize as being a vital part of the war on ISIS and central to the survival of the Iraqi state.
The most convincing argument against working with the militias is their human rights abuses
The U.S. can make its involvement in the war on ISIS conditional on a serious integration of the militias into the armed forces. It can help Iraq achieve this by increasing its support to the Baghdad government and strengthen, in the process, its capacity to reign in the militias.
This is possible to implement.
Iraq is not Libya. It does not have disparate militias groups that have irreconcilable conflicting political or ideological visions.
The militias are rife with rivalry but they overlap considerably with the Shia political elite and the clerical establishment.
They are entrenched within the social, political and religious fabric of the Shia community. They function, to a great extent, as part of, rather than independently of, the political process and the state.
Whilst Iran has influence over Iraq's Shia militias, it does not control all militia groups currently fighting ISIS
A large number of the Popular Mobilisation Unit militias (Iraqi volunteers that were mobilized by the Iraqi state and the religious establishment after the fall of Mosul) report to local Iraqi actors, as opposed to Iran.
The U.S.' influence on the ground is also stronger than it was before Mosul fell.
Baghdad's Shia-ruling elite is vulnerable; it has been hit hard by the low price of oil and recognizes that something must give way.
All of this can be capitalized on by the U.S. in its war on ISIS, whilst also challenging Iranian influence in the country but only if the U.S. starts pursuing proactive, realistic and creative policies that acknowledge realities on the ground.