Who are the terrorists?

If the US army is trying to cow the Iraqi people into electing a puppet government approved by the US, by making them believe that they have more to fear from the US than they do from the anti-US Iraqi forces, as this article suggests, then who are the terrorists? They have destroyed Fallujah, not to get at Zarqawi as they originally claimed, but apparently just to create an example for the Iraqi people of what may happen to them if they don't cooperate. They refuse to (publicly) count the Iraqi dead, and they're now apparently unwilling to release figures on how many US soldiers are dying. This suggests that the numbers are bad. Very bad.

It's like the US, as a country, is committing suicide, dramatically and publicly. How can they ever function as a credible and respectable world power after this? I would suggest that they can't, no matter who's in charge.