The race is on in Iraq between destabilisation and reconstruction.
On the one side is the Iraqi resistance. Its policy is to cause chaos in the hope that out of the wreckage, the occupation will end and perhaps even that Saddam Hussein himself will be propelled back to power.
On the other are the Coalition or occupation authorities and their Iraqi allies. They hope to transfer power by the end of next year and in the meantime are pouring in money to rebuild the basic infrastructure.
The latest bombing targeting the Red Cross could be a sign of jihad
At the moment, the Iraqi resistance is able to range freely across Baghdad and in what is known as the "Baathist triangle", an area where loyalty to Saddam Hussein remains strong.
Strike at will
So perhaps it holds the advantage. It can strike where it wants to.
And it has shown its ability to attack simultaneously across a range of targets.
Remarkably little is known about it. It is presumably partly at least organised by Saddam loyalists who obviously have access to weapons and explosives. There appears to be no lack of volunteers as suicide bombers.
It has even been able to extend its arsenal. It deployed a rocket launcher against the hotel where the US Deputy Defence Secretary Paul Wolfowitz was staying. An American Black Hawk helicopter was shot down.
Iraqi police a target
It is logical for police stations to be attacked, as they have been in the latest bombings. The Iraqi police represent the biggest long term threat to the resistance.
But the attack on the Red Cross - at the start of Ramadan - suggests an element of jihad, or Muslim holy war. The Red Cross could be seen as a Christian interloper not just an instrument of collaboration. Some see the hand of al-Qaeda in all this.
Certainly the spectacular and ruthless nature of the attacks, with suicide as a modus operandi, is characteristic of al-Qaeda tactics.
Maybe there is common cause between the Baathists, who are almost universally secular, and the Islamists. The problem for the occupation intelligence authorities is that nobody really knows.
And without good intelligence, a counter insurgency policy is impossible to conduct.
Hence the US Defence Secretary Donald Rumsfeld's typically forthright conclusion, revealed in a leaked memo, that this would be a "long, hard slog."
The best hope for the Coalition is that ordinary Iraqis will see a better path in elections and reconstruction.
Slowly but surely, according to this theory, life will become better and a political system will evolve which will defeat efforts to destroy it.
But the timetable is tight. Under international pressure, the US and UK conceded in the current Security Council resolution that a timetable for a constitution and election should be put forward by the Iraqi Governing Council by 15 December.
The hope is that, as the British representative in Baghdad Sir Jeremy Greenstock said recently, the transfer of power can take place "by the end of 2004."
It is a difficult though not an impossible task.
Democracy the key
The importance of establishing structures of government was stressed in a report by the Rand Corporation and a former US Ambassador James Dobbins, who played an important role in other US-led national building exercises.
Ambassador Dobbins concluded that the key to stabilisation is the development of democracy.
Drawing on lessons from the successful occupations of Germany and Japan after the war, and the more recent transformations in Bosnia and Kosovo, his report said:
"Nation-building is not principally about economic reconstruction: rather it is about political transformation. The spread of democracy in Latin America, Asia and parts of Africa suggests that this form of government is not unique to Western culture or to advanced industrial economies: Democracy can, indeed, take root in circumstances where neither exists."
However, he also had a warning - he stresses that democracy will not just emerge.
"What principally distinguishes Germany, Japan, Bosnia and Kosovo from Somalia, Haiti and Afghanistan are not their levels of Western culture, economic development or cultural homogeneity," he says.
"Rather it is the level of effort the United States and the international community put into their democratic transformations."