After 3 years of war in Iraq, it is abundantly clear that the occupation is actually making the situation worse. Last fall the British commissioned a poll that showed that 82% of Iraqis want our troops to leave. A recent poll of US soldiers there shows that over 70% think we should leave. Why? because they know that our presence is not helping.
The level of violence continues to increase. There are more attacks and reprisals every day, Amnesty International and others have documented continuing torture in American and Iraq government prisons. Death squads kill with impunity. Ordinary people are scared to go out on the streets due to the general lack of security. Basic services such as clean water and electricity are in very short supply. Promises of reconstruction remain mostly unfulfilled. Most people there blame the Americans.
Extremists are using the anger most people there feel at the mess to increase their own power. Ethnic Cleansing and Civil War are looking more and more likely. Rumsfeld says that the US would stay out of a civil way but it is hard to see how that would be possible.
In short, the first thing we need to do to improve the situation in Iraq is to leave. This will lower the level of tension and cut off support for the insurgency by removing their best recruiting tool, occupying Americans. Only then can the conditions for a settlement between all the parties be created.