Marine commanders seem to be trying to accomplish two things by stepping aside for a new Iraqi battalion which is to take up Marine postions along the southern edge of the city. One, the new Iraqi forces are in serious need of some kind of win. Giving them the task of essentially acting as police forces in areas the Marines have swept of insurgents is a mission with training wheels. Success here would provide something to build on, not to mention be great PR.
And two, Marines can put off swarming into the so-called Golan neighborhood in the north, which remains a resistance stronghold. It is that oldest part of the city with its narrow streets that would be bloody job for the Marines to clear hovel-to-hovel. Commanders no doubt would prefer to simply pulverize the area via air and arty, and that may yet happen. In any event, the Marines will stay in their northern positions to prevent the bad guys from melting away or get re-supplied.
But in the near-term the Iraqis will likely be given a chance to get a hold on the rest of the city.