1) U.S. soldiers being killed in Iraq at a rate of several per day.
2) When U.S. soldiers kill Iraqi civilians, even if the U.S. soldiers are trying as hard as possible not to, it involves foreigners killing Iraqi civilians.
3) There is a lot of unemployment in Iraq.
4) It's particularly difficult for police and the military in Iraq, since they know they or their families can be targeted. This would be less true if their were many more families of police and military (i.e., there is strength in numbers).
The U.S. government should pay 500,000 Iraqi volunteers (men and women) an average of $6000 per year, for the next 2 years, to serve as a temporary military force. U.S. commanders and officers should serve as the senior officer core (say, lieutenant colonel and above). Most or all of the U.S. military below that grade should be sent back home to the U.S. The U.S. military would also stay to provide air support/surveillance.
The cost of this would only be $3 billion per year, or $6 billion total. An additional $1 billion would be available for equipment and for a death benefits fund (say, $15,000 each) for soldiers killed in action.
This solution provides lots of money for individual Iraqi citizens (approximately 1 out of every 50 Iraqis would be in the military). It will dramatically reduce the number of U.S. troops killed in Iraq (I'd estimate the reduction to be 80+%). It will ensure that Iraqis are fighting insurgents (aka, terrorists). It will get around the problem of finding senior military officers/commanders who are Iraqis (these would likely be people who already served in the Iraqi military under Saddam Hussein's regime, and therefore could be problematic in terms of commitment to a free and democratic Iraq).
I'm open to comments on this plan. I'd especially like to hear from Iraqis, and from U.S. soldiers in Iraq.