The bloodshed in Iraq is getting worse, and involving U.S. troops less and less. In the last year, over 10,000 Iraqi civilians died from terrorist and internecine violence. That's about twice as many deaths as the year before. In the last year, fewer than 400 civilian deaths were the result of American military action, and some $20 million in compensation was paid out to the next-of-kin for those civilian deaths. This is four times as much as was spent in 2004, largely because the compensation program has been more energetically applied. These payments are a part of Iraqi culture. Even Saddam used them, during the war with Iran in the 1980s, and avoided a lot of ill-will because of it. Works for U.S. troops as well.
Iraqis have, over the last three years, come to accept the fact that this violence is an Iraqi problem. Until the last year, most of the killers were former Saddam enforcers. Those thugs are still around, but in the last year, most of the blood is being shed by Kurds and Shia Arabs seeking vengeance against Sunni Arabs in general, and known Sunni Arab thugs in particular. American troops are no longer feared as much as they used to be, for the Iraqi killers are more common and prolific. For Sunni Arabs, U.S. troops are often seen as protectors. Moreover, Iraqis have noted that when Americans stage a raid, there is rarely any gunfire at all. But Iraqi troops and police are much more trigger happy. The Americans like to come in quiet, and at night, with no lights (because of the night vision gear.) Iraqi security forces come in with lots of shouting, lights and gunfire.
The terrorists rarely get a shot at American troops any more. But Iraqi civilians are another matter, and the usual target these days are people who can't defend themselves. The government is trying to rein in the death squads formed within the police (for the most part) and army (much more rare). But this is hard. The government has not been able to shut down the Sunni Arab terrorists and criminal gangs either. People don't feel safe, especially in mixed Sunni/Shia neighborhoods and villages. The terrorists also abuse Sunnis Arabs who do not support the killers.
American security consultants point out that you have to go after the terrorist leaders to make a dent in all this violence. It's no secret that most of the Sunni Arab violence is paid for. Killing is still a big source of employment in the Sunni Arab community, as it was when Saddam was in power. Take down the paymasters, and you take away a lot of the incentive to kill. The government is willing to go after al Qaeda leaders (most of whom are Iraqis these days, at least in Iraq), but the Sunni Arab terror groups are basically tribal issues. If you want to shut these guys down, you have to cut a deal with the tribal overlords. That's taking time, and in the meantime the killing gets worse. The Sunni Arabs try to return the favor when their own are murdered. But that's becoming harder to do as the Kurds and Shia Arabs get better at doing what was, for so long, a Sunni Arab monopoly.