In 1967 a U.S. Army sergeant in Vietnam posed for a photograph. The photograph, later published nationally, showed the sergeant holding the decapitated heads of two enemy corpses. The soldier was court-martialed and convicted of "conduct prejudicial to good order and discipline." There were other reports of U.S. soldiers cutting the ears and fingers off the enemy dead. Gen. William Westmoreland, commander of U.S. forces in Vietnam, denounced the mutilation of dead bodies as "subhuman" and "contrary to all policy and below the minimum standards of human decency." Not only is the mistreatment of dead bodies "contrary to all policy," it is also a violation of the laws of war.

As [First Lt. Shawn] Spainhour talks to the sheik at the mosque, two bearded, middle-aged men in sweaters suddenly walk up to the Americans with a tip. Two men down the street, they insist, are members of the Mahdi Army. The soldiers quickly get back into the Strykers, as do Osama and his men, and they all race to Mahala 830. There they find a group of young men stringing electrical cables across the street. Some of the men manage to run off, but the eleven who remain are forced into a courtyard and made to squat facing the walls. They all wear flip-flops. Soldiers from the unit take their pictures one by one. The grunts are frustrated: For most of them, this is as close to combat as they have gotten, and they're eager for action.

"Somebody move!" shouts one soldier. "I'm in the mood to hit somebody!"

Another soldier pushes a suspect against the wall. "You know Abu Ghraib?" he taunts.

The Iraqis do not resist - they are accustomed to such treatment. Raids by U.S. forces have become part of the daily routine in Iraq, a systematic form of violence imposed on an entire nation. A foreign military occupation is, by its very nature, a terrifying and brutal thing, and even the most innocuous American patrols inevitably involve terrorizing innocent Iraqi civilians. Every man in a market is rounded up and searched at gunpoint. Soldiers, their faces barely visible behind helmets and goggles, burst into a home late at night, rip the place apart looking for weapons, blindfold and handcuff the men as the children look on, whimpering and traumatized. U.S. soldiers are the only law in Iraq, and you are at their whim. Raids like this one are scenes in a long-running drama, and by now everyone knows their part by heart. "I bet there's an Iraqi rap song about being arrested by us," an American soldier jokes to me at one point.

As the soldiers storm into nearby homes, the two men who had tipped off the Americans come up to me, thinking I am a military translator. They look bemused. The Americans, they tell me in Arabic, have got the wrong men. The eleven squatting in the courtyard are all Sunnis, not Shiites; some are even members of the Awakening and had helped identify the Mahdi Army suspects.

I try to tell the soldiers they've made a mistake — it looks like the Iraqis had been trying to connect a house to a generator - but the Americans don't listen. All they see are the wires on the ground: To them, that means the Iraqis must have been trying to lay an improvised explosive device. "If an IED is on the ground," one tells me, "we arrest everybody in a 100-meter radius." As the soldiers blindfold and handcuff the eleven Iraqis, the two tipsters look on, puzzled to see U.S. troops arresting their own allies.

The American forces responsible for overseeing "volunteer" militias like Osama's have no illusions about their loyalty. "The only reason anything works or anybody deals with us is because we give them money," says a young Army intelligence officer. The 2nd Squadron, 2nd Stryker Cavalry Regiment, which patrols Osama's territory, is handing out $32 million to Iraqis in the district, including $6 million to build the towering walls that, in the words of one U.S. officer, serve only to "make Iraqis more divided than they already are." In districts like Dora, the strategy of the surge seems simple: to buy off every Iraqi in sight. All told, the U.S. is now backing more than 600,000 Iraqi men in the security sector — more than half the number Saddam had at the height of his power. With the ISVs in place, the Americans are now arming both sides in the civil war. "Iraqi solutions for Iraqi problems," as U.S. strategists like to say. David Kilcullen, the counterinsurgency adviser to Gen. Petraeus, calls it "balancing competing armed interest groups."

But loyalty that can be purchased is by its very nature fickle. Only months ago, members of the Awakening were planting IEDs and ambushing U.S. soldiers. They were snipers and assassins, singing songs in honor of Fallujah and fighting what they viewed as a war of national liberation against the foreign occupiers. These are men the Americans described as terrorists, Saddam loyalists, dead-enders, evildoers, Baathists, insurgents. There is little doubt what will happen when the massive influx of American money stops: Unless the new Iraqi state continues to operate as a vast bribing machine, the insurgent Sunnis who have joined the new militias will likely revert to fighting the ruling Shiites, who still refuse to share power.

"We are essentially supporting a quasi-feudal devolution of authority to armed enclaves, which exist at the expense of central government authority," says Chas Freeman, who served as ambassador to Saudi Arabia under the first President Bush. "Those we are arming and training are arming and training themselves not to facilitate our objectives but to pursue their own objectives vis-a-vis other Iraqis. It means that the sectarian and ethnic conflicts that are now suppressed are likely to burst out with even greater ferocity in the future." (my emphasis)