Can we assume that what he means by two-state situloon is an Arab state and a Kurdish state? I don't see how the Sunni Arabs would want to belong to a state in which the Shias are an even bigger majority without the Kurds than with them, and I don't see what the Shias would have to gain by including a hostile population that shows no sign of accepting the rule of a non-Sunni majority. And for the Kurds, as you note, an independent state would be perilous.If a three-state federation doesn't hold, it would make more sense for the Kurds to join the Shias in a two-state federation. Such a union would probably satisfy Turkey and Iran (and might in fact set an example to both). The Sunni Arabs don't need Shia Iraq's oil to survive on their own; in return for peaceful coexistence with their neighbors, they could meet any deficits with subsidies from the Gulf states.