A lot of American intel people are very pessimistic about sectarian violence in Iraq. It is the most critical problem confronting the government and the Coalition. And many analysts see no way to curb it. Especially since militia leaders, such as radical cleric al Sadr, appear to have lost control of some of their followers. Much of the killing is being done by small independent cells, who no longer even pay lip-service to obeying their ostensible militia leadership. A few cells exist in the police, and are particularly dangerous.
Sectarian violence aside, there have been some useful successes in the war. Attacks on security forces and critical infrastructure are down, there has been some progress in co-opting the largely Sunni tribes of Anbar into the fight against al Qaeda. Recently, Iraqi intelligence operations managed to bring down a major Baathist network that was moving money around to finance local terrorist operators. In the process, police busted several important mid-level Baath officials, which will reduce Baathist terrorism. But the increase in sectarian attacks, mostly Shia on Sunni, but with some Sunni on Shia as well, is more than making up for the decline in attacks on security forces and infrastructure, or Baathist activity. The sectarian violence is all about revenge, with Shia, and even some Kurdish, gunmen out to avenge decades of murderous rule by the Sunni Arab minority.