The British embassy in Iraq was apparantly originally located outside
the Green Zone in Baghdad. Why did they move into the CPA compound on
August 23, 2003? Official explanation and unofficial analysis are both
welcome.

Dear Rtrenzi, 

The official and unofficial reason alike is security. "British
diplomats in Baghdad initially operated out of the old British embassy
but it is overlooked and has only a thin wall for protection. The
operation has been moved inside the heavily protected US zone in
Baghdad that houses the coalition provisional government." (SOURCE:
Ewen MacAskill, "Britain plans to move embassies to safer sites", The
Guardian, GuardianUnlimited,  January 16, 2004,
<http://www.guardian.co.uk/alqaida/story/0,12469,1124387,00.html>).

As you can see from the link I've provided, the government planned or
moved other emabssies as well.

On August 23rd, 2003, the embassy was evacuated, because of a therat
of impending attack against it:
"Britons flee Baghdad embassy", BBC News,  23 August, 2003,
<http://news.bbc.co.uk/2/hi/middle_east/3175513.stm>

The embassy was not reopened until 28 June 2004, with the handover of
authority to the Iraqi Interim Government. It has additional offices
in Basra and Kirkuk.
(SOURCE: Politics.co.uk, "Embassies, High Commissions and Consulates"
<http://www.politics.co.uk/issues/embassies-high-commissions-and-consulates-$3120754.htm>).

An ambassador was appointed in July 2004 
(See: NEW BRITISH AMBASSADOR ARRIVES IN IRAQ,
<http://www.britishembassy.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerate/ShowPage&c=Page&cid=1089130787732&a=KArticle&aid=1089131557994>).

The official site of the embassy states only "Owing to security
concerns, the current Embassy is now situated in the "Green Zone"
which contains a number of Government and diplomatic buildings."
(SOURCE: "History of the Embassy",
<http://www.britishembassy.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerate/ShowPage&c=Page&cid=1052839096382>).
It seems from it, that the relocation is not expected to be permanent,
and that as soon as the security risks will be lifted, the embassy
would return to its traditional location.

I hope this answers your question. Please contact me if you need any
clarification on this answer before you rate it. My search terms:
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Thank you so much for the speedy reply.

Thank you for the rating.