DC with all respect I think your questions oversimplify the situation.

There are real insurgents in Iraq. They are Sunnis from the old Baathist regime who are afraid they are going to lose their control of the country to the Shia;;; there are the Shia who have been the majority of the population who think they will get screwed again, and to a lesser extend some kurds who want an independent state. Many of these people do not trust the United States, and they believe we are there to occupy them forever (rightly or wrongly).

The Terrorists are another story. It is in their interests to keep the insurgency going. That is why Zarqawi blew up the Shiite mosque....to get the Shiites mad at the Sunnis.
The Al quaeda forces in Irag have no interest in building up that country, they want to see it devolve into chaos and force the US out.

At this point the US is in a very delicate position because we have to foster some trust among the groups of insurgents and do what we can to keep these people from having a civil war. I will not go into my usual diatribe about the stupidity of this operation, because we are there and we are stuck with it. I think the release of people from Abu Grahib was a good start, and I am encouraged by the offers the Iraqi Government is making about offering an amnesty to insurgents who will lay down their weapons. The only hope in Iraq is that the people there realize it is in thei best interests to put aside tribal differences and rebuild their country into what could be a rich, oil producing place.

The Al Quaeda there will do everything in theor power to make sure this does not happen, and slowly those people need to be found out, and executed. If we can get some of these militias to lay down their arms, it might get easier to determine who the minutemen are and who the terrorists are. I suspect there are fewer Al Quaeda there than we think.