And is no longer applicable since the Iraqi government is no longer an interim government.

Note the second quote you cited:

Under Iraqi law, as MNF soldiers, they should have been handed over to the Coalition authorities.

"Under Iraqi law" refers to the new Iraqi government laws regarding Multi-National-Force soldiers.

Note some other lines you omitted as to the reasons for taking action:

"From an early stage, I had good reason to believe that the lives of the two soldiers were at risk and troops were sent to the area of Basra near the police station to help ensure their safety by providing a cordon. As shown on television, these troops were attacked with fire-bombs and rockets by a violent and determined crowd.

"Later in the day, however, I became more concerned about the safety of the two soldiers after we received information that they had been handed over to militia elements. As a result I took the difficult decision to order entry to the Jamiat police station. By taking this action we were able to confirm that the soldiers were no longer being held by the IPS. An operation was then mounted to rescue them from a house in Basra.

"I should put the scale of yesterday's disorder into context. British armoured vehicles being attacked by a violent crowd, including with petrol bombs, makes graphic television viewing. But this was a small unrepresentative crowd (200-300) in a city of 1.5 million. The vast majority of Iraqi people in MND(SE) are law abiding and value the contribution made by coalition forces to maintaining stability and security.

"It is of deep concern that British soldiers held by the police should end up being held by militia. This is unacceptable and I should stress that we won’t hesitate to take action against those who are involved in planning and conducting attacks against coalition forces.

That pretty much says it all, doesn't it? The British soldiers were no longer held by the Iraqi government, but were held by a militia.

So, I suppose my earlier statements about this incident showing Iraq sovereignity are invalid, even though the desire by some to paint the US & British as evil oppressors in any circumstance still is quite valid.

Thanks for providing a reasoned & coherent response.