Coalition forces captured two terrorists in Baghdad who admitted they worked for Iranian intelligence. Officially, Iran has been keeping radical Iranian Shias out of Iraq, and believes that a democratic Iraq would be best for Iran, because the majority of Iraqis are Shia. But Iran itself is split, with Islamic conservatives holding a disproportionate amount of power and trying to maintain a religious dictatorship, These Islamic conservatives support attempting to establish a similar religious dictatorship in Iraq, and is apparently sending terrorist teams, as well as money to like minded Iraqi (like radical leader Muqtada al Sadr).
Yesterdays suicide car bombing of a funeral of another terror attack victim has done two things. Most obviously, it has made al Qaeda, and like minded terrorists, even more unpopular among Iraqis. Secondly, it has created another conspiracy, this one maintaining that all the terror bombings and criminal activity are an American plot to keep Iraq unstable. Iraqis have this capability to simultaneously talk about these imaginary conspiracies, and still hold more rational views of their situation. This can be seen by the increased number of tips being provided by Iraqis about the location of the terrorists, and the workshops where they build their car bombs and store weapons.
The interim government adopted new laws that allow for imposing curfews and allowing police to use special detention powers. These rules will most likely be applied in Sunni Arab areas where support for anti-government gunmen and terrorists has been strongest.