AlQaeda Looks More Like Family Here?

A familiar scene of the last 4 years. It's been concluded that nothing more can be achieved militarily in Iraq, yet, the military is still there indefinitely and continuing to make strikes on 'suspected' insurgents or Al Qaeda.
The key word in every news story of killings in Iraq is 'suspected'. I guess tried and executed from a distance.
This is a strike Friday reported as Al Qaeda near Baghdad.
As always there are 2 versions to who has been killed. The truth likely lies somewhere between but the U.S. continues to have the weaker credibility which is appalling.

1) There are no U.S. troops visible in pics removing bodies from the scene. The townspeople are there. They look like they're removing neighbors to me, not Al Qaeda terrorists. They look to be grieving for people they know. Everyone from the mayor on down is angry at the U.S.
2) The U.S. says 20 were killed including 2 women who are now taking roles in the insurgency. Or, this is a half assed attempt to explain why women were killed at the scene at all?
3) The mayor, the police ,the townspeople all report that these were 2 extended families in 2 homes that were killed in the raid. They claim the dead include up to 10 children and 6 or more women. Why would they lie and all report the same scene.
4) Some of the wrapped bodies are clearly too small to be other than children.

If the townspeople are all shocked and angry by this slaughter, aren't they automatically part of the insurgency ? Shouldn't they all be killed? The mayor, the police the neighbors, every last one of them? Why differentiate when everyone in Iraq wants you dead or gone?

Why doesn't the military just admit that they can't kill the insurgents without killing their families and supporters?

Are we going to have 2 more years of these killings for nothing, because Bush can not accept that he's wrong to be there?