The recent increase of fighting in Sunni Arab areas appears to be part of the original plan for turning Iraq around. This plan proposed  to build up the anti-Baath Iraqi forces to the point where they could deal with the terror tactics of the Baath and Islamic radical (including al Qaeda) factions. The Baath party members, and supporters, are desperate fighters, because they have no where to go, and face retribution once the Shia majority elect a new government. Many of the Sunnis were no fans of Saddam either, and the government seems to be exploiting that to bring a large segment of the Sunni population in to the fold. Most of Iraq continues to be quiet, and once the current battles in Sunni Arab areas is over, the entire country will be.

The biggest problem in Iraq is the corruption, which defines how they do business and how political power is exercised. Conceptually not much different from the "take care of your people" idea in the West, in Iraq "your people" is defined much more narrowly. The concept of "public good" is held by only a minority of the population. As a result, the reconstruction money, as much as possible, is spent, at the lowest level, by non-Iraqis, to prevent much of it being stolen. Sad, but true. Plenty has already been stolen, when it was given to "responsible Iraqis" for reconstruction projects. Sending in auditors does have an impact. Once the Iraqis realize what auditors do, the auditors get death threats, or worse. Maybe we should send a bunch of marines to accounting school....

Ultimately, the corruption, and lack of experience with democratic government, will be a larger problem than the violent resistance of the Sunni Arabs and Islamic radicals.