AAM: "The Iraqis may go it alone."

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Michael reports the latest developments in the Status of Forces Agreement discussions: the Iraqis say they can take over and set the terms for our troops to remain in the country.

Unfortunately, the satellite feed from Baghdad was lost before he could go into detail; however, there is more about this in the next two clips.

KYRA PHILLIPS, CNN ANCHOR: And breaking news just coming in to American Morning. The future of American troops in Iraq being discussed right now. The U.S. and Iraq apparently in deep discussions about a very sensitive negotiation process aimed at charting the course of the security mission, but the deadline is rapidly approaching. We're going to be talking more about that.

CNN is in Baghdad this morning. And our Michael Ware is watching the developments right now.

Michael, tell us about the developments.

MICHAEL WARE, CNN INTERNATIONAL CORRESPONDENT: Okay, Kyra. Essentially the U.S. mission at Iraq is yet another make or break moment. What's happening right now is that the United Nations authority for the U.S. troops to be here is running out -- clock is ticking down to the end of the year. So Washington is trying to broker an agreement with Baghdad to regulate the presence of U.S. Forces. Now, these are those negotiations.

There's been some dramatic developments this week, some of which we'll tell you about exclusively right now. First of all, we had the Iraqi Prime Minister visiting neighboring Amman, this morning saying the negotiations are in deadlock. He then quickly pulled that back a little bit to say -- well, the negotiations over America's first draft of the agreement are in deadlock.

Yet we can tell you now that yesterday we interviewed one of the senior aides to the prime minister. And he said that just this week, America in fact delivered a second draft of the agreement. And he said that in principle, nothing has changed from the first draft and it's going to be rejected as well.

So it seems to confirm the prime minister's initial, perhaps more truthful statement that the negotiations over this critical arrangement for America have been stalled and are in deadlock. What we can also tell you is that there's another option.

The Iraqis may go it alone. The Iraqis are saying that they can go and create their own laws and they will dictate to America under what terms your troops will remain here. This could determine the fate of the U.S. mission in Iraq.

(satellite feed lost)

PHILLIPS: All right. We apologize for that. We just lost Michael Ware out of Baghdad. But pretty interesting developments right now, talking about this Iraq-U.S. security plan. You know there's been huge debate right now about whether troops should stay in Iraq, how long troops will stay in Iraq. It's one of the main discussion points among all the presidential candidates right now.

Michael Ware coming in to us, bringing this developing news that Nuri al-Maliki, the prime minister of Iraq, saying that a long-term security pact right now has reached a dead end. So what exactly does that mean and is this a decision that can be made before a new president is elected in the United States?

One of the most volatile issues, of course, on the plate, on the campaign trail right now. We'll try and get Michael back to talk about this more. But at this point, getting word out of Iraq of this long-term security pact in Iraq reaching a dead end. Negotiations of course still continue.