Alright, first of all I don't think you guys are giving the Iraqis enough credit. We, and I include myself here, all talk of the Iraqis as if though they were sheep, with a singular will and a simple mind. I don't think any of us can speak for the Iraqis, because we are simply not there. We're not living with the bombings, the occupation, and we're certaily not tuned in to Iraqi sentiment. That said, some assumptions and generalizations must be made if this discussion is to proceed, but try to keep in mind the inherent bias persent. First thing that we have to aknowledge is that an occup[ied people have every right to fight back, with whatever means are at their disposale. This has been the case everywhere, not just Iraq, so trying to find some unique reason for the insurgency is absurd, the occupation is the reason for the insurgency. Simple. We can try to mask it any way be like, hell, even the Iraqis can try to mask it, but the way I see it, the occupation breeds resistance.
So, basically, the occupation needs to end. Not right away mind you, though I don't agree with some of your apocolyptic predictions, but the important thing is that there needs to be a clear date, beyond a shadow of a doubt, by which that the US forces will withdraw from Iraq. Set and date and stick to it.
At the risk of speaking for a people I know very little about, I would say that most Iraqis are not really fundamentalists or overly zealous religious types. The reason that the insurgency is made up in part by jihadists (and before I forget, thanks aldo for recommeding Power fo Nightmares, I've watched 2 of 3 parts so far) is that these people are organized and well funded, which means that they are in a position to field a capable fighting force. I don't think it necessarily reflects the Iraqi people's views. Similarly to Hamas in the occupied territories, the fact that they are overtly religious is secondary to the fact that they are insurgents fighting an occupation. I doubt that Iraqis would elect a fundamentalist leadership without the fear and hatred of the Americans being used to coax them. Much (most?) of the rank-and-file insurgents are ordinary Iraqis, and I defy any of you to tell me that you wouldn't do the same under the circumstances.
So, set a clear date for the withdrawl of troops. But you still need elections, which means bringing in someone more credible than the Americans to supervise them. The UN might not cut it by itself, which means enlisting the aid of Arab groups to help monitor the ballots. Whoever is elected, the Americans have to leave. Nope, doesn't matter if they elect Osama bin freaking Laden, America has to stick by the withdrawl date. And this means the military bases, this means the "advisors" within Iraqi ministries, and this also means scaling back the American embassy to normal propartions. Having the world's largest embassy, staffed by 3000 people doesn't exactly instill a sense of trust.
Basically, the point is not to try to fight the wishes of the Iraqis. You can't win that way. I don't think that Iraqis are naturally aligned with some of the more fundamentalist elements within Iraq. There is an alliance because both are opposed to the ooccupation. Without that, I doubt that after 25 years of dictatorship they're just going to piss away their freedom.
--will post more later probably.--