The Islamic terrorists have carried out a one week offensive against Shia Iraqis, using suicide bombers. The death toll is is about 200, nearly all of them Shia civilians. The Shia community has not responded with a civil war, which is the main goal of the terrorists. Thirteen American troops died as well, during the last week. However, the death rate among U.S. troops was 37 percent less in September than it was in August (and the months before as well.) The terrorist offensive, accompanied by the usual exhortations delivered via the Internet and Sunni Arab mass media, was much less powerful than earlier bombing campaigns. This doesn't get reported much, because it's not terribly exciting, but more and more suicide bombers are being caught by police before they can set off their explosives. Day by day, the government improves the security on the street. Even in Sunni Arab areas, where the people do not like the Shia and Kurd government much at all, people join the police (it's often the best paying jobs available) and diligently go after terrorists in their neighborhoods. Many Sunni Arabs support the terrorist operations, but not in their own back yards. This makes it increasingly difficult for the Islamic terrorists to operate. While the Sunni Arab cops can often be bribed, or coerced, into looking the other way when Islamic terrorist operations are encountered, many Sunni Arab cops will bust any al Qaeda operatives they come across. If not that, they will pass on information about al Qaeda operations. This is why there has been a constant (for the last few months) campaign of raids against terrorist operations in central Iraq. These attacks have had an obvious impact on al Qaeda, and the Sunni Arab attempts to regain control of the government. There are fewer attacks in Baghdad, largely because the larger number of police and troops guarding the city, and the terrorists need to use their fighters to try and maintain some control in the Sunni Arab towns outside of Baghdad.
The Iraqi police are still corrupt (an ancient local custom), and often inept (most have only two months of training), but they do have a sense of self-preservation. For over a year, the terrorists have targeted the police, and the cops have responded by going after the terrorists. Some police quit, or even ran away. But replacements were recruited, and month by month, fewer and fewer cops were inclined to flee in the face of terrorist violence.
The government is also frustrated at being unable to get their story out to the international media. Reports of police success, and terrorist failures, are generally ignored by the international media, and especially the media in neighboring nations run by Sunni Arabs. There is a widespread media hostility to the American and British overthrow of Saddam, and establishment of democracy in Iraq. That's an interesting phenomenon in itself, but it does not stop the progress of the government in Iraq, and the retreat of the al Qaeda and Sunni Arab terrorists (or "freedom fighters" in the eyes of many foreign journalists.) You can distort reality, but you can't change it.