With last week’s Fallujah ambush and mutilation of four Americans and the outburst of violence in Baghdad and southern Iraq this week, the United States suddenly confronts a whole new threat. The American-led occupation faces a spreading insurgency by both the die-hard Sunni supporters of the toppled Saddam Hussein and a militia representing the Shiite majority. American and allied forces are mounting counterattacks that cast doubt on a timetable that calls for turning over power to an unnamed provisional Iraqi regime by June 30.

As for the horrifying Fallujah incident, the official line of top American military and civilian leaders is that Fallujah is an isolated case, in which an area favored and enriched by Saddam Hussein resents the American invasion and hopes to restore something like the old regime of tyranny and favoritism. The New York Times’ veteran reporter, John F. Burns, probably the best-informed authority on Iraq before and after the fall of Saddam, suspects otherwise. He reported Sunday a sense that “Fallujah marked a watershed in the effort to transplant to the Arab world a facsimile of American society, with democratic norms and institutionalized tolerance.”

He wrote that fewer Westerners than ever in Iraq held to that dream in the face of suicide bombings that had killed more than 1,000 Iraqis. Then came the coordinated Shiite militia uprising that spread from the slums of Sadr City in the Baghdad outskirts to the holy city of Najaf and at least two other cities 250 miles south of the capital. Militiamen armed illegally with weapons including rocket-propelled grenades and Kalashnikov rifles seized checkpoints and police stations that had been turned over to a newly trained Iraqi police and civil defense force.

Mr. Burns, an outspoken supporter of the U.S.-led overthrow of Saddam Hussein, questioned the understated response by American officials to the upsurge of violence. He quoted a helmeted American military spokesman as describing the Najaf fighting as “a fairly significant event” and adding, “At this point it’s pretty settled down.” And he wrote that a spokesman for L. Paul Bemer III, the civilian head of the American occupation authority, “struck a similar untroubled note: ‘We have isolated pockets where we are encountering problems,’ he said.”

In contrast, the Times reporter wrote, large groups of Shiites gathered at street corners in the contested cities expressed contempt for Americans and their allies for losing control, for at least several hours, of Sadr City, with a population of 2 million and named for a powerful Shiite ayatollah who was assassinated by Saddam’s agents in 1999. His son, Moktada al-Sadr, had issued the call to “terrorize your enemy” and set off the rampage by militiamen said to number in the tens of thousands. Mr. Burns quotes men on the streets of Sadr City as yelling at approaching Western reporters: “The occupation is over! We are now controlled by Sadr! The Americans should stay out.”

A worst-case likelihood is that military actions to root out and kill the Fallujah mutilators and subdue the suddenly aggressive Shiite militia will further inflame the situation and spark a cycle of mutual retaliation in the classic manner of Middle Eastern blood feuds. Unless the U.S.-led forces can somehow get the occupation onto a relatively peaceful, constructive track, the violence can, among other things, upset President Bush’s timetable of portraying himself as a successful war president and putting this country on a clear course of withdrawal from Iraq by the November election.

Conceivably, it could also kindle a still minor but smoldering inclination to get out entirely and leave Iraq to the Iraqis.