Here's a piece from the NY Times that covers some of the questions raised in the OP.
In Northern Iraq, the Insurgency Has Two Faces, Secular and Jihad, but a Common Goal
By RICHARD A. OPPEL Jr.
Published: December 19, 2004
MOSUL, Iraq - After a three-hour firefight here in northern Iraq this month, American commanders were surprised to learn that one of the 22 insurgents they had killed was a Saudi. Even more intriguing, one of the principal leaders of the insurgency attended the funeral, the commanders learned.
This was Mohammed Sharkawa, who is described as a former member of the Ansar al-Sunna organization who now directs several hundred insurgents here in Mosul. As one commander, who said Mr. Sharkawa had killed several of his own cousins, put it, he is "a brutally ruthless criminal, almost like a mob wiseguy who started whacking dudes."
Yet Mr. Sharkawa represents only one face of the insurgency. He works for jihadist goals, but another movement is secular, the Americans say, though both have a common goal: disrupting the Jan. 30 national parliamentary elections and intimidating prospective voters.
As they do so, each group operates with sophisticated leaders careful to stay in the background while relying on part-timers to carry out attacks and killings on a pay-by-assault basis, according to American officials, who are always striving to calculate the extent and nature of the insurgency.
Meanwhile, the insurgents benefit from a stream of money trucked in from Syria for the cause, the Americans say.
Mr. Sharkawa, the commanders say, is a leader of the Salafists, or extremist Islamists who want a government so weak that the vacuum allows a Taliban-style theocracy to develop locally. That happened in Falluja, which was ruled by an ad hoc fundamentalist government from summer until American marines invaded in November. "Right now, if we could get one guy off the street in northern Iraq, he would be the guy," Brig. Gen. Carter F. Ham, the top American commander in Mosul, said. "He is the organizer for a number of operations up here."
The Salafists are working with a quite different group, commanders say, made up of Saddam Hussein loyalists and others from his Baathist Party who want to regain power by promising a return to the "stability" of Baathist rule. It is no surprise that they would gather in Mosul, a city of two million with an enduring base of Baathists that has long been favored by former Iraqi military officers.
Saddam loyalists "differ significantly from the religious extremists, who don't want any strong government," General Ham said. "What they both want now is instability and insecurity."
Other insurgents here identify with the Jordanian militant Abu Musab al-Zarqawi and Al Qaeda. According to American military statistics compiled after the invasion of Falluja, nearly 500 of roughly 700 insurgents in Iraq aligned with or sympathetic to Mr. Zarqawi and Al Qaeda live in or around Mosul.
In the compilation, the most detailed picture of the Iraqi insurgency to be made public, military officials estimate that about 11,000 to 20,000 insurgents were spread throughout Iraq. Of that number, 700 to 1,200 fled Falluja in November just before the invasion.
The largest group remains loyal to Mr. Hussein: Some 2,200 to 3,300 insurgents are classified as "hard core" supporters of the former ruler. Another 6,100 to 10,200 are "part time" supporters, a designation one military official said included those paid to carry out rocket-propelled grenade and other attacks on American troops.
In addition, as many as 2,900 "Shia extremists" - including rebel cleric Moktada al-Sadr's Mahdi militia - operate mostly in Baghdad and southern Iraq, while 1,200 to 2,400 "Islamic extremists" who do not identify themselves with Mr. Zarqawi or Al Qaeda are also part of the estimates.
The figures were compiled from data from each of the seven military commands in Iraq using observations by troops, interrogations and other intelligence, said one military official, who emphasized the data were rough calculations and that the estimates are ever-changing.
In Mosul, the insurgents' main focus has been terrorizing Iraqi residents and killing in brutal fashion those believed to work with Americans. More than 100 people - many in the Iraqi National Guard or Iraqi Army - have been shot in the head execution style, or decapitated, burned, dismembered or otherwise killed in the last month. The killers order that the bodies not be moved, to spread word of the deaths - and the people obey, until American troops arrive with body bags. Insurgents also burned three-quarters of the city's election registration materials, sending officials scrambling to sign people up.
"Their common aims are to disrupt the elections process and delegitimize the existing government," said Col. Tom Knight, the deputy commander of American troops in northern Iraq. "There's no denying it has been a successful tactic and that it has discouraged local support."
"We continue to learn each day that these guys are smart, they're tough and they are committed," he added. "When we deal them a tactical military defeat, they come back and counter with something like a diffused intimidation campaign. I can't sit here and tell you that we've overcome their best efforts yet."
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Yet commanders also say there are more hopeful signs: Commerce is returning and the markets of Mosul are busy, while American and Iraqi forces are getting better tips about insurgent activities. "We are starting to see the people of Mosul passing along intelligence about where some of these people are hiding out," General Ham said.
Equally significant is that fewer anti-American Iraqis exist or appear willing to do battle. It used to cost just $50 to hire an Iraqi youth to fire a rocket-propelled grenade at American troops; it now costs $100 to $200, the general said.
But the increase is small compared with amount of money that insurgents have at their disposal - mostly cash that is driven by car or truck into the country from Syria, General Ham said, where scores of senior Baath Party officials and Saddam apparatchiks fled after the American invasion last year.
"They're not hurting for cash." he said. "That's a problem."
With so much money flowing in, past incompetent or easily bribed or intimidated border guards, the insurgents have been able to keep refilling their ranks of low-level or part-time mercenaries while their leaders hide in the dusty warrens of Old Mosul district or the Yarmouk neighborhood.
Important captures have been made recently, including a top Zarqawi lieutenant, Abu Saeed. More than 200 insurgents have been killed in Mosul in the last month.
But the secular and jihadi wings each have a few hundred core operators in Mosul, and "the fighters who can be rented out probably number in the thousands," General Ham said.
"The hard core group is quite smart; they get others to do their work for them," the general added. "All the dumb guys are dead or in jail. The surviving leaders are very competent."