Item: - Phasing the operation and dealing with the militias:...Prime Minister Maliki has been very clear about the need to bring militias under control, and their has been some discussion of relocating some elements, giving them jobs, disarming them, etc. They cannot be treated in the same way as the insurgents, but they must be dealt with. Moreover, the clear litmus test is Sadr City and the Mahdi militia. Any operation that does not deal with this problem cannot bring security or stability to Baghdad.

BBC: Dozens Killed in Baghdad Attacks
Gunmen in the Iraqi capital Baghdad have killed at least 40 people at a fake police checkpoint, in an apparent sectarian attack against Sunni Muslims.

Police say Shia militants stopped cars in the western Jihad district, separated Sunnis and shot them...
Al Jazeera: Shia militia kills dozens in Baghdad
...The victims were gathered together, Sunnis were then separated according to the names on their identity cards and killed after about an hour, said Maitham Abdul-Razzaq, an Iraqi police lieutenant.

An Iraqi interior ministry official, speaking on condition of anonymity for security reasons, said Shia militiamen wearing masks and black uniforms also roamed through the area, grabbing people from the street...
We are very damn close to the tipping point between fighting the insurgency and the outbreak of full-fledged sectarian warfare. Although both the coalition and the nascent Iraqi government have taken measures to interdict this drop into the abyss, too many missed opportunities and a lack of operational focus continues to channel actions in that direction.

If you haven't give it a read already, I recommend a once-over of Dr. Terrill's Strategic Implications of Intercommunal Warfare in Iraq, published last Feb by SSI.