The Surge is ending: The final brigade is on its way out of Iraq right now, after tremendous security success. For the next few months, we will have to hold our breaths and see if the situation keeps improving with fewer forces.
The Bush adminsitration has wanted a "long-term" US presence in Iraq, including permanent bases (like in Korea, Japan, Germany). Al-Maliki, the Prime Minister, has suggested a counter-proposal: A withdrawal timeline. At first glance, this would be a crippling defeat for George Bush, vindicating all of his political opponents that have been demanding such a thing for years.
But more likely, it is a compromise proposed by the administration itself, after realizing that permanent bases were not feasible. If Al-Maliki told Bush "we don't want permanent bases, and even if I did, I couldn't make them happen," then a withdrawal timeline is the immediate second choice.
Al-Maliki mentioned that the timeline would stretch until 2011 or 2012--2 or 3 years into the new presidency. At this point, I think most people in the administration are betting that Obama is going to win the election, and are hedging against him. That, or they could be trying to defeat him.
Stealing the initiative: If the Administration agrees to a 2012 withdrawal timeline and Obama wins the election, he will be hard-pressed to implement his 16-month withdrawal plan, given a previous treaty arrangement with the Iraqis (which he is bound by the Constitution to obey). If the Bush administration's war thinkers are worried about a speedy withdrawal, setting their own timeline with the Iraqis is the best way to prevent it.
Influencing the Election: This move has clear implications in the election that Obama will have to deal with very carefully. He could be caught in a double-bind. If this timeline agreement goes through, Obama will have to choose whether or not to dramatically change his policy. Should he obey the timeline, and try to delicately drop his 16-month withdrawal plan? He might draw serious criticism for flip-flopping, discourage his base, or lose his anti-war cred with moderates. Or should he defy the treaty, and stick to the plan? The Republicans may try to snatch moderates back by calling him out-of-touch, idealistic, unwilling to deal with reality, ignoring international treaties, etc. This timeline may make his Iraq stance an automatic liability, which is definitely a win for an administration that wants someone who is going to stick closer to its foreign policy aims into the future.
Whatever is happening, it is likely very thoroughly-thought long-term planning by the Bush administration. Al-Maliki is a close enough Bush ally that he almost certainly would not publicly request a request for a withdrawal timetable unless it had been already agreed-upon (or unless the administrations were at a deadlock, but it does not appear so at all). And, having been already agreed-upon, the intuitive thing for Bush to do is announce it himself, to show the public he is dedicated to changing his policy with changing times. But he gave the initiative to Al-Maliki, allowing the US press to call it a defeat for him. When he agrees to the timetable, it will appear as if he "caved to pressure." This is exactly what he wants. If it looks like he fought this timetable tooth-and-nail, then the Democrats will be politically forced to rejoice when he signs it, and won't be able to criticize it. Bush, once again, is going to get (almost) what he wants, despite a Democrat congressional majority. Sometimes, Bush is more clever than most give him credit for, and it is this very reputation for lacking subtlety that will allow him to outsmart the Democrats in congress once again.