Tuesday's meeting in the city of Ur, birthplace of the biblical patriarch Abraham in ancient Mesopotamia, brings together representatives from across the country: Kurds, Sunni and Shiite Muslims, as well as people who have lived in exile for years.
It is, said White House spokesman Ari Fleischer (news - web sites), "an important and great day for the Iraqi people."
But it also offers a preview of the kind of tumult expected in the months ahead among groups that distrust America nearly as much as they distrust each other.
Many Iraqis are staying away because they oppose U.S. plans to install retired Gen. Jay Garner as an interim leader.
On Monday, the largest Iraqi Shiite group, the Supreme Council for Islamic Revolution in Iraq, said it would boycott the meeting.
"Iraq needs an Iraqi interim government. Anything other than this tramples the rights of the Iraqi people and will be a return to the era of colonization," Abdul Aziz Hakim, one of the group's leaders, told reporters in Iran.
U.S. officials have acknowledged that not all groups want to participate. They have played down expectations the fact that the conference is occurring at all, they say, is a success story in itself.
This is only "the fledgling first meeting of what will hopefully be a much larger series of meetings across Iraq," said Jim Wilkinson, spokesman at U.S. Central Command.
"Not everyone can attend this meeting and the meeting is not designed to represent every single constituency inside and outside Iraq."
Other sessions around Iraq in coming weeks are designed to bring together other Iraqis and exiles, and a national conference will ultimately select the interim authority, a senior U.S. government official told reporters here Monday.
He said he hoped it would be selected within weeks, and anticipated a role for the United Nations (news - web sites) in the process once the national conference occurs.
Many allies support an international conference to pick leaders of the interim government, as was done in Afghanistan (news - web sites). But the United States wants to assemble an interim government made up of a mix of supportive Iraqi nationals and exiles.
Tuesday's meeting is a first step toward that goal. About 100 Iraqis are expected to attend: half from inside Iraq, half exiles.
The moderator will be Zalmay Khalilzad, the White House envoy to Iraq who played a key role in guiding the formation of Afghanistan's transitional government. Garner is also expected, along with representatives from coalition countries Britain, Australia and Poland.
Wilkinson stressed that the meeting was designed to get Iraqis talking about what they want for the future, and described the agenda as an "unscripted, free-flowing forum of ideas" that would be dominated by Iraqis talking, not Americans.
But an unscripted discussion in Ur could bring Iraq's hostilities to the surface. They're never far below.
There is the divide between a Sunni Muslim minority that controlled Iraq under Saddam Hussein (news - web sites), and a Shiite majority that wants to dominate.
But even among Shiite groups, there is fierce enmity; in the holy city of Najaf, these fissures were blamed for an incident Monday in which three Shiite clerics were threatened by a mob.
Kurdish groups, meanwhile, appear unwilling to compromise on their demands for more autonomy, and for expanding their borders to include the oil-rich city of Kirkuk and the Kurdish parts of Mosul. Neighboring Turkey, fearing an uprising by its own Kurds, says this is unacceptable.
But the Kurdish groups are divided, too. The two major factions formed an alliance during the war, but now one has accused the other of breaking an agreement not to send Kurdish troops into Kirkuk.
Neither is there agreement among Iraqis on America's role.
Ahmed Chalabi, head of the London-based Iraqi National Congress, said the United States "should maintain military forces in Iraq until the first constitutionally, democratically elected government takes over."
How long will that take? "Less than two years," he said.
But other opposition leaders say privately they fear the U.S. administration is using the meeting to try to force Chalabi on them.
Chalabi was the first top Iraqi opposition leader airlifted by the U.S. military into southern Iraq a move interpreted by some as a way to help him build a power base among the Shiites, though American officials say he was brought in merely because he offered forces to the coalition.
Neither Chalabi nor many other leaders of anti-Saddam groups are likely to show up at the meeting; lower-level delegates are expected in their place. U.S. officials say the meeting was designed to be a working-level affair to allow Iraqis to get to know Garner.
But many of those who are attending say they don't want Garner in charge.
"We will press for any Iraqi civilian administration regardless of what the American say; an administration by Garner is not acceptable," said Mowaffak al-Rubaie, a physician and opposition activist who is attending.
He said the Americans have provided opposition figures with this outline of how Garner's administration would be structured:
Each ministry would be headed by an American, either military or civilian. Each minister would have two American deputies and eight American advisers. The minister would have four other Iraqi advisers from inside the country and four Iraqi exiles.
The difficulties of reconstruction were outlined Monday by James Wolfensohn, president of the World Bank (news - web sites). He noted that Iraq's foreign debt may be as big as $400 billion and said its standard of living has fallen by two-thirds in the last 20 years, and it wasn't certain that Iraq's central bank survived the looting rampage of recent days.
Interviewed on PBS' "The NewsHour with Jim Lehrer," Wolfensohn said the World Bank withdrew its personnel from Iraq in 1980, and he is in touch with officials in Brazil, Morocco, Malaysia and Mideast countries who have recent experience in Iraq.