We're running out of money to rebuild Iraq's infrastructure. Law enforcement in many parts of the country has taken the form of tribal militias and death squads. In order to induce American soldiers to re-enlist to cover the shortfall in recruitment, the Army is increasing re-enlistment bonuses again, offering many thousands of dollars to each person who re-ups, especially in hard-to-fill capacities. In addition to the ongoing violence, the "economic plan" instituted unilaterally by Tribune Bremer during the occupation is ill-suited to bring prosperity to Iraq in the future, and Iraq's constitutional process has produced a document of dubious quality, fraught with ambiguities and unresolved issues, certain to trigger continued rebellion even if it's voted for by the requisite numbers in the requisite number of provinces in Iraq.
Quagmire is too refined a word for it.