The Sunnis and Shiites are at each other's throats in Iraq, or so it seems, but as Juan Cole explains, this issue is much more complex:

It is an abiding paradox of contemporary Iraq that the Mahdi Army and the Sunni Arab guerrillas are slaughtering each other daily, but that young Shiite cleric Muqtada al-Sadr (the leader of the Mahdi Army) has a better political relationship with Sunni Arab MPs and leaders than any other Shiite. During the first siege of Fallujah in late March and April of 2004, Muqtada's Sadrists sent aid convoys to the besieged Sunnis there. In spring of 2005, the Association of Muslim Scholars (hardline Sunni) accused the Shiite Badr Corps paramilitary of having formed anti-Sunni death squads inside the special police commando units of the Ministry of the Interior. This open accusation caused a political crisis between AMS and the Supreme Council for Islamic Revolution in Iraq, the Shiite fundamentalist party that sponsors the Badr Corps. It was Muqtada al-Sadr who engaged in shuttle diplomacy to calm the two parties down. He could play this role because he had credibility with both sides. From his side, Muqtada makes a distinction between "Sunnis" on the one hand, and "Saddamis" and "Nawasib" on the other. (Nawasib are those Sunnis who have a violent hatred for the Shiites and the family of the Prophet, and nowadays in Iraq "al-Qaeda" would be such a group in Muqtada's eyes.) So many Sunni fundamentalist MPs and officials of the Iraqi Accord Front (some of them rooted in the Muslim Brotherhood) are acceptable to Muqtada. He would argue that the Mahdi Army is not killing Sunnis, only Saddamis and Nawasib. From the Sunni Iraqi side it makes most sense to think of it in negative terms. Most Sunni Arabs in Iraq now hate the United States and Iran. Muqtada hates the United States and expresses resentment of Persian dominance of Shiism. So if you think of them as Iraqi nativists, they have a lot in common. If the fundamentalist Sunnis could gain the Sadrists as allies, they would have a better chance of getting rid of the Americans, their main goal in life. And, allying with Shiite Islamists who are perceived as real Iraqis isn't so hard for them. The hardline Salafis in the mold of Abu Musab al-Zarqawi and the hardline neo-Baathists, both ethnically Sunni, reject this strategy of talking to Muqtada. In contrast, the National Dialogue Front led by secularist Salih Mutlaq is said to be tight with Muqtada. Some elements of the Sunni fundamentalist Iraqi Accord Front are also relatively friendly to him. A politically connected Iraqi explained all this to me as though it was the most natural thing in the world. I agree that it is baffling. But it isn't just the Iranians who perceive it this way. [... SNIP] But somehow I fear that the Iraqis as things now stand couldn't pull this off, and that if the US left the Sadrists and the Sunni fundamentalists would gradually fall on one another. Dislike of the US presence is after all among the main things they have in common, and that would be gone.

It's more than safe to say, at this point, that American occupation of Iraq will accomplish only one thing, a continually worsening state. Since pulling out might possibly improve the situation (see above), that is still better than the current policy. For the sake of the hundresds of Iraqis and Americans getting slaughtered every day, until a better policy is fomented, we need to cut-and-run/withdraw/retreat, whatever you want to call it; so far it's the only hope. People's lives... it the most important component of any military plan, and yet often the most overlooked.