Iranian Islamic terrorism is becoming more of a threat in Iraq, as Sunni terrorism fades. The Iranians are Shia Moslems, a sect of Islam that has a bloody history with the mainline Sunni Moslems. The Iraqi Badr organization, which spent over a decade in exile in Iran before coming home after Saddam was overthrown, is the most dangerous Shia terrorist threat. The home-grown Sadr organization is also a threat, and ultimately a deadly rival for the Badr group. But right now, the Badr people are the best organized, and doing the most damage. The Badr group backs Shia fundamentalist political parties, and has as its goal the establishment of a Shia Islamic republic in Iraq. Most Iraqis do not want this (at least according to the opinion polls, and the talk on the street), but Badr has the gunmen and the organization to make a run for establishing a religious dictatorship. The U.S. knows what Badr is up to, but wants the Iraqis to deal with it.
Meanwhile, the Badr militias have been useful to the United States by helping keep al Qaeda, and other Sunni Arab terrorists out of many Shia Arab areas. Where that is not possible, the Badr forces have fought the Sunni Arab terror groups, using tactics that the Americans cannot use. The U.S. will ultimately be blamed for this, even though there is no practical way U.S. forces can stop it. The Badr gunmen are Iraqis, often come from the same neighborhoods as the Sunni Arab terrorists, and have joined the police force in large numbers. American advisors have tried to control the bad behavior of the Badr cops, but the first priority for most Iraqis is security, and shutting down the Sunni Arab terrorists. Now that effort has grown to include Badr (and Sadr, and free lance) Shia Arab death squads that practice vigilante justice against real or imagined Sunni Arab terrorists.
This is not an uncommon development in counter-terrorism campaigns. The victims often get themselves organized and go after those who are terrorizing them. Because the Badr and Sadr crowd have their own agenda's (setting up a religious dictatorship), they will not completely cooperate with American efforts, and there are still ugly encounters between the vigilantes and American troops. The Shia vigilantes know enough to stay out of the way of American troops, and this is becoming easier as security in more Shia areas is being completely turned over to Iraqi police and army troops. A major reason for so many Sunni Arab leaders wanting to side with the government now, is to get some protection from the death squads.
It's not going to be easy, and will be messy, to put down the death squads. These killers have been hitting back at terrorists who have killed many Shia Arabs. But ultimately, Iraqis are going to have to choose between a bloody fight with the vigilantes, or another dictatorship.