By Nick Assinder
Political correspondent, BBC News website
Defence Secretary John Reid, in characteristically robust mode, has insisted the latest incident in Iraq will not blow the government's strategy for the country off course.
PM adamant UK will finish the job
British troops will remain in Iraq until their mission is complete and the Iraqis themselves want them withdrawn, he insists.
But both those declarations are now coming under serious question.
What precisely is the mission, and are Monday's events not further evidence that there is a real desire by Iraqis for the occupation to be brought to an end immediately?
Probably worse for Tony Blair, whose attempts to put the war behind him before he stands down seem doomed, parallels with Vietnam are starting to be drawn by serious politicians and commentators.
The threat of civil war engulfing the country appears to escalate by the day, throwing into doubt the achievability of the government's objective of staying put until a stable, democratic state has been created.
And the simple political impact of the image of British troops being fire bombed in their tanks cannot be underestimated.
There is the danger for Mr Blair that more people will start asking what UK troops are doing there if they are not wanted.
But the prime minister is adamant that he is not about to cut and run, and there are just as powerful voices arguing that to do so would be gross negligence.
Former Colonel Tim Collins, while raising his own questions about the occupation, declared "if you break it, you own it" to characterise the Government's dilemma.
That may not be the most flattering way of describing Tony Blair's position.
But the prime minister believes he has a duty and a responsibility to see this conflict through to the bitter end.
And he will always claim that Iraq is a far better place with Saddam removed and on the path to freedom and democracy. He is not about to turn his back on the Iraqis who he says desperately want that freedom and democracy.
Mr Blair is committed to an orderly withdrawal, but the current situation makes putting any sort of timetable on that a hugely risky exercise.
Yet that is precisely what is being demanded by an increasing number of politicians and commentators right across the political spectrum.
Meanwhile, underneath all this, but a constant refrain, is the continuing speculation over the prime minister's future.
The timing of his retirement, and expected transfer of power to Gordon Brown, is inextricably linked with the continuing mess in Iraq.
Every time he attempts to move onto the domestic agenda, primarily his crusade to build irreversible reform of the public services, Iraq literally explodes back into the headlines.
And his hopes of emerging from Downing Street with a legacy not dominated by the war and its consequences seem to fade further.
Then there is the other constant refrain: "What would Gordon do?"
Is it a possibility that the chancellor, while remaining loyal to the prime minister's position on Iraq until the transfer of power, would then bring it all to a swift end?
Would he risk infuriating the US administration, or would the mid-term elections by then have transformed the political landscape in Washington in favour of a similar strategy?
In the meantime the prime minister must be bracing himself for things getting worse in Iraq before they get better.
The end-of-year elections may well ensure that. The question is whether they will get better with UK troops still there and Tony Blair still in Downing Street.