Islamic terrorists in Iraq are increasingly surviving by using many of the same techniques employed by organized crime. More effort is going into major crimes (grabbing millions of dollars worth of cash or valuables at once), and intimidating the police, politicians and religious leaders (via targeted assassinations.) As the Iraqi police became more effective over the last four years, police commanders became more of a target for Islamic terrorists and criminal gangs as well. This tactic takes advantage of the culture of corruption so endemic in the region, and particularly Iraq. Police commanders (and other leaders) often have the option of taking payments, or playing it straight and dodging assassins.
For organized crime, terrorism is just another tool. For example, terrorism is regularly practiced by organized criminal groups. That's how the famous ones, like the mafia, or the Russian or Colombian gangs, make money and maintain discipline. Not just to get corruption, but to sustain the popular extortion technique, where victims pay "taxes" to prevent attacks from local criminals.
What separates "terrorist organizations" from criminal gangs is ideology and goals. Organized crime groups just want to make money. Islamic terrorists, however, have other goals. In this case, imposing Islam on the entire world or taking control of the Iraqi government. Making money using criminal methods is a means to an end for them, not an end in itself. Keep in mind that terrorist acts are a constant, and most of these actions are carried out by criminals in pursuit of a payday. Political or religious terrorists are using similar terrorism to either attract attention, as a fund raising tool, or a weapon to win concessions from governments.
Historically, it's quite common for terrorist organizations, be they motivated by political or religious goals, to gradually turn into largely criminal gangs. That's where the mafia came from. Once a resistance organization (against foreign rulers in Italy), it evolved into a purely criminal outfit, and migrated to the United States, along with millions of law-abiding Italians. The IRA (Irish Republican Army) is of more recent vintage (late 19th century originally, but revived in the 1970s) that gradually turned into a group of criminal gangs that mainly paid lip service to the IRA's political goals (of a united Ireland).
Iraq had dozens of major criminal gangs even in Saddam's police state. Once Saddam was overthrown, these gangs largely sided with the Sunni terrorists trying to put Saddam (or some other Sunni dictator) back in charge. The more purely criminal branches tend to survive, which is how the surviving mafia organizations can trace their lineage back to 19th century freedom fighters. But in the last two decades, the mafia and IRA have been reduced to much smaller, and less effective, organizations.
The police approach to terrorism has worked numerous times in the past few decades. India crushed powerful Sikh separatists in the late 80s and early 90s by concentrating on what were basically police methods of developing informers and double agents and going after the key people and the criminal fund raising activities. At the same time, Egypt was crushing Islamic radicals, using similar techniques. Throughout the 1990s, Algeria fought a vicious Islamic terrorist group, finally reducing their numbers from over 10,000, to less than 500. Same thing with Israel's victory over Palestinian terrorists who were successful, for a few years after 2000, with suicide bomber attacks inside Israel. The U.S. adopted a lot of the Israeli techniques for intelligence collection and agent development.
American and Iraqi counter-terrorism efforts have managed to tear up the Islamic terrorist groups. Many Sunni Arab terrorists have accepted (with some trepidation) various amnesty deals. Al Qaeda, which is still largely a foreign outfit, has been crippled over the last few months with the killing or capture of over 80 percent of their senior leaders. Being foreigners, and favoring attacks on civilians, made al Qaeda the most hated group in the country. Plenty of tips from concerned citizens because of that. Iraqi members of al Qaeda have switched to criminal gangs, relegating Islamic terrorism to the "what I do in my spare time" category. While the U.S. contributed lots of essential (UAVs, intelligence collection and analysis) support for the counter-terror battle, the Iraqis did most of the work on the ground. The Iraqi cops are taking advantage of the fact that most Iraqis want peace. Three decades of Saddam's misrule, and seven years of post-Saddam terror have created a widespread desire for peace. While there are far fewer terror attacks (less than ten percent of those three years ago), they persist, and police believe there are enough diehard Islamic radicals and violent criminals to keep the bombs exploding for another five years or more.
The very (but not completely) autonomous Kurdish government in northern Iraq is increasingly unhappy at the growing number of Iranian incursions (using troops, artillery and aircraft) to attacks Kurdish separatists making attacks inside Iran. The Iraqi Kurdish government won't crack down on the separatists, as their terrorism is popular with most Iraqi Kurds. The Shia dominated Iraqi government won't go after the Iranian government over this issue, because both Iraqi and Iranian Shia politicians see their Sunni Kurdish minorities as a threat.
June 6, 2010: The U.S. Army arrested a 22 year old soldier in Iraq, and accused him of releasing classified combat videos and a quarter million diplomatic messages to news organizations.
June 1, 2010: The Iraqi Supreme Court finally approved the results of the March elections. Because of disputes over the vote, there is still no new government. This difficulty in working out political compromises is common the world over. The more smoothly functioning democracies of the West took centuries to evolve, but many countries, like Iraq, were stuck way in the past. Even though Iraq had a constitutional monarchy in the 1930s, and a very active parliament, it didn't take, and degenerated into a military dictatorship by the 1950s. This time, the Iraqis are more determined to make it work. But old habits are hard to break.
Iraqi security personnel have officially taken over all security for the Green Zone. This 10 square kilometer (four square mile) sanctuary in downtown Iraq was long a sanctuary for Americans and senior Iraqis. Most Baghdad residents now want the Green Zone, and the way it disrupts major traffic patterns, eliminated. But rich and powerful Iraqis want to live in the Green Zone, as protection from criminals and terrorists (both of whom murder, kidnap and rob the rich). So, for the moment, the Green Zone lives on, under Iraqi management.
May 24, 2010: For the first time since 2003, there are more troops in Afghanistan (94,000), than in Iraq (92,000, headed for 50,000 within two months).
May 20, 2010: Shia leader Muqtada al Sadr is reforming his militia, the Mahdi Army, in Basra. Twenty-two months ago, the Iraqi government went after the Sadr militia and crushed it. Sadr fled to Iran in 2007, and he is still there. Sadr had over 10,000 armed men in his militia when he ran to Iran, and is trying to get a few thousand back in action to deal with the continuing terror attacks on Shia civilians by Sunni Arab terrorists.