Insurgent violence has taken a heavy toll on the U.S. in Iraq. A series of attacks earlier this month pushed the total of American fatalities past 1,800. The mounting casualties have shaken American confidence. Terrorism has hit Iraqis even harder. On Capitol Hill, there are bipartisan calls for the White House to establish a timeline for withdrawal. Secretary of Defense Rumsfeld has been floating trial balloons. Senior military officials and diplomats, meanwhile, seek to deflate the insurgency. They urge Iraqis to embrace and engage former Baathists, Islamists, and Arab Sunni rejectionists. If the Sunnis can be brought into the fold, the conventional wisdom goes, peace and reconciliation will prevail.

But the conventional wisdom is wrong. The insurgency has gained momentum as a result of failed U.S. policy and well-meaning but wrong-headed assumptions.

The coalition’s ouster of Saddam Hussein was popular among the vast majority of Iraqis. They greeted American troops warmly. There were flowers and candies. Iraqis danced as Saddam’s statues fell. But the honeymoon faltered and collapsed amid looting and confusion about American intentions.

Throughout the 35-year Baathist dictatorship, survival depended upon maintaining a low profile and divining the leader’s wishes. Iraqis would note with whom the leader met as a sign of favor. Officials would parse televised speeches to fine-tune their sycophancy.

Generations of Iraqis continued their Kremlinology when Jay Garner arrived as the director of the Office of Reconstruction and Humanitarian Assistance. They watched as he repeatedly met with Saad al-Janabi, a former Baathist businessman and a close associate of Saddam’s late son-in-law, Hussein Kamal. Iraqis interpreted Garner’s outreach to an agent of influence of the former regime as a sign that the White House might restore the former regime to power. The fear had precedent. In 1991, President George H.W. Bush called upon Iraqis to rise up in rebellion against Saddam Hussein. They did. But the White House did not come to their aid. According to the Iraqi narrative, Washington shared responsibility for the subsequent massacres by releasing Republican Guard prisoners-of-war in time for their redeployment against the civilians. Garner’s choice of dinner guests might have been innocuous to American diplomats and military officers eager to catalyze reconciliation, but it created a chill of distrust among ordinary Iraqis. More importantly, it convinced high-level Baathists that they need fear no justice.

A faulty belief in reconciliation is largely responsible for the disintegration of security in Mosul. Rather than confront Baathists and Islamists, General David Petraeus empowered them. Discussing his strategy at the Washington Institute for Near East Policy on April 7, 2004, Petraeus explained, “The coalition must reconcile with a number of the thousands of former Ba’ath officials … giving them a direct stake in the success of the new Iraq.” Good in theory, but the result was Potemkin calm.

Petraeus assigned former Baathist General Mahmud Muhammad al-Maris, for example, to lead Iraqi Border Police units guarding the Syrian border. Al-Maris handpicked allies and poked holes in an already porous border. Petraeus allowed another former Baathist, General Muhammad Kha’iri Barhawi, to be Mosul’s police chief. Not only did such a choice demoralize Iraqis who suffered under the former regime, but it undercut security.

On July 26, 2004, Brigadier General Andrew MacKay, head of the Coalition Police Assistance Training Team, told Pentagon officials. “We are seeing an increasing confidence within the Iraqi Police Service as they realize they are more than a match for the terrorists – even more so when they are led by officers of Major General Barhawi’s ability.” Unfortunately, the confidence was misinterpreted. After the November 2004 uprising in Mosul, Coalition officials learned that Barhawi had organized insurgent cells and enabled Islamists and former Baathists to briefly seize the city. Barhawi is now in prison. And both Iraqis and Americans are dead because of misplaced confidence and baseless theories.

Under Saddam Hussein, Baathists survived by ingratiating themselves to power. Too often, U.S. officials would base judgments on their own conversations, unaware of what former regime officials said behind their backs. The loyalty former regime elements and Islamists show is illusionary. In January 2004, for example, a delegation from the Ninewah provincial council visited Makhmur, a town in the Erbil governorate but tied administratively to Mosul. When an accompanying diplomat excused herself briefly, a translator – a former student of mine – said that councilmen berated the mayor for collaborating with the Americans. In Mosul, Petraeus created not placidity, but rather a safe-haven for terror.

Engagement and reconciliation may be the bread-and-butter of diplomacy, but in Iraq they are a prescription for failure. There is a correlation between re-Baathification and violence. Baghdad’s security situation deteriorated sharply after Coalition Provisional Administration head L. Paul Bremer on April 23, 2004 declared, “Many Iraqis have complained to me that de-Baathification policy has been applied unevenly and unjustly. I have looked into these complaints and they are legitimate.”

While Bremer argued that only implementation – not policy – changed, Iraqis felt otherwise. Their perception was validated one week later when Coalition forces lifted the siege of Fallujah and empowered former Baathists and insurgents in the name of reconciliation. Within a month, car bombings across Iraqi had increased 600%.

A belief persists in Foggy Bottom, Langley, and the White House that extensive de-Baathification is unpopular and destabilizing. Facts suggest otherwise. The Embassy embraced politicians like Interim Prime Minister Iyad Allawi and former Governing Council member Adnan Pachachi because they favored Baathist reintegration. Given a choice at the ballot box, however, Iraqis rewarded candidates who promised tough implementation of de-Baathification. Pachachi, once the shining star of the State Department, failed to win a single seat. Incumbent Allawi mustered only 15% of the vote.

Engagement has a price. In June 2005, word leaked that U.S. officials had engaged Iraqi insurgents in order to encourage them to join the political process. A National Security Council senior director rationalized the approach by differentiating between “talking to” and “negotiating with” insurgents. The Arab world drew no such distinction. A June 28, 2005 ash-Sharq al-Awsat cartoon depicted Uncle Sam, surrounded by barbed wire, with an insurgent blocking his path to escape. The lesson drawn was that the U.S. was weak, not magnanimous. Violence spiked soon after.

Political compromises sometimes carry a high price. As a consequence of adding 15 Sunni Arab members to the Constitutional Commission, women may lose their rights across Iraqi society. Contrary to popular wisdom, Iraq’s Sunni political leaders are more Islamist than many of their Shi’ite counterparts. Blatant sectarian pandering backfires.

American strategy in Iraq is fatally flawed. Not just policy implementation has gone awry, but rather the assumptions upon which policy is based. Iraq is neither an academic problem nor a template upon which to impose theories imported from Bosnia and Kosovo. It is a unique society with a very vocal population. Blinded by a false conventional wisdom, we refuse to listen. The cost has been bitterness among natural allies, emboldening of terrorists, and unnecessary American and Iraqi casualties.

Mr. Rubin, a resident scholar at the American Enterprise Institute, is editor of the Middle East Quarterly.