The specific cut in question — approximately $550 million from the State Department budget for Iraq — jeopardizes the current plan to establish a string of civilian-led “presence posts” in northern Iraq that will remain after the last American soldiers leave in December 2011. These facilities — slated for Mosul, Kirkukand Diyala, respectively — will provide the U.S. with the continued diplomatic presence on the ground necessary to help keep the peace in what has remained one of Iraq’s most explosive and unstable areas.

Unless additional funds can be found, and quickly, officials in the administration warn that plans for one of these three posts will need to be scrapped entirely — most likely the one in Diyala. This would be deeply unfortunate, given this province’s strategic significance. Indeed, if large-scale violence reignites in Iraq, it is as likely to start in Diyala as anywhere else.

The province is often described as Iraq in microcosm. Northeast of Baghdad and adjacent to the Iranian border, Diyala is bisected by both Sunni-Shiite and Arab-Kurdish fault lines. Al Qaeda in Iraq declared the capital of its Islamic state there just a few years ago, while Iranian-backed militias have long used the province as a major route to smuggle IEDs and other lethal aid into the country.

More recently, in late 2008, open warfare nearly broke out in oil-rich northern Diyala between Kurdish peshmerga and the Iraqi army troops, and the area remains one of the most dangerous flashpoints between the two groups. Keeping a robust U.S. presence in the area, as military forces draw down, will be a critical stabilizing factor in preventing Arab-Kurdish tensions from spiraling into civil war. It will also help in ensuring that relations do not break down between the province’s still-distrustful Sunni community and the Shiite-led central government.

Some may question whether a continued U.S. presence in Diyala is worth the expense. In fact, the amount required by the State Department to maintain a presence in Diyala — approximately $300 million — is paltry in comparison to the billions of dollars expended by the Pentagon every month in Iraq — and that the U.S. government will save if our military is able to continue to draw down responsibly.

Conversely, if conditions in Iraq deteriorate because we fail to remain adequately engaged in this critical region during the period ahead, the costs of our failure — both economic and strategic — will be exponentially greater. Indeed, this is a classic case in which an ounce of prevention is worth a pound of cure.

The Obama administration can still find a creative solution to the funding gap. As the military reduces its footprint in Iraq, the Defense Department could transfer funds to the State Department or even foot the bill directly to help maintain a civilian-led presence in Diyala. Defense Department personnel could also be used to augment the civilian-led team and reduce the financial burden on the State Department.

More broadly, as the Obama administration has itself increasingly emphasized, the United States is entering a historic window of opportunity in Iraq. Whatever the divisive disagreements about the past, Democrats and Republicans alike recognize the potential for Iraq to become a key strategic partner for the United States and force for stability in a crucial part of the world. By contrast, if Iraq unravels on President Obama’s watch because of perceived U.S. inattention or mismanagement, it will mark a grievous defeat for our national interests.

As the president himself rightly put it this week, “The hard truth is that we have not seen the end of American sacrifice in Iraq.” Preserving our presence in Diyala will be a critical test of that commitment.

Given the thousands of American lives and hundreds of billions of dollars that have gone to stabilizing Iraq, it would be senseless and tragic for this progress to be jeopardized now. While the cost of keeping a U.S. presence in Diyala is comparatively modest, the cost of walking away will be immense.

Marisa Cochrane Sullivan is deputy director of the Institute for the Study of War. She served as the command historian for Gen. Raymond Odierno in early 2009 and traveled extensively in northern Iraq in April.