g them, and having a network of spies even in the US military bases. According to the report, Iraqis—many of them former members of Hussein's secret services—were now effectively running Al-Qaeda in Iraq, with "foreign fighters' roles" seeming to be "mostly relegated to the cannon fodder of suicide attacks", although the organization's top leadership was still dominated by non-Iraqis.
The high-profile attacks linked to the group continued through early 2007, as AQI claimed responsibility for attacks such as the March assassination attempt on Sunni Deputy Prime Minister of IraqSalam al-Zaubai, the April Iraqi Parliament bombing, and the May capture and subsequent execution of three American soldiers. Also in May, ISI leader al-Baghdadi was declared to have been killed in Baghdad, but his death was later denied by the insurgents; later, al-Baghdadi was even declared by the US to be non-existent. There were conflicting reports regarding the fate of al-Masri. From March to August, coalition forces fought the Battle of Baqubah as part of the largely successful attempts to wrest the Diyala Governorate from AQI-aligned forces. Through 2007, the majority of suicide bombings targeting civilians in Iraq were routinely identified by military and government sources as being the responsibility of al-Qaeda and its associated groups, even when there was no claim of responsibility, as was the case in the 2007 Yazidi communities bombings, which killed some 800 people in the deadliest terrorist attack in Iraq to date.
By late 2007, violent and indiscriminate attacks directed by rogue AQI elements against Iraqi civilians had severely damaged their image and caused loss of support among the population, thus isolating the group. In a major blow to AQI, many former Sunni militants who had previously fought alongside the group started to work with the American forces (see also below). The US troops surge supplied the military with more manpower for operations targeting the group, resulting in dozens of high-level AQI members being captured or killed. Al-Qaeda seemed to have lost its foothold in Iraq and appeared to be severely crippled. Accordingly, the bounty issued for al-Masri was eventually cut from $5 million to $100,000 in April 2008.
US soldiers and Sunni Arab tribesmen scan for enemy activity in a farm field in southern Arab Jibor, January 2008
AQI has long raised money, running into tens of millions of dollars, from kidnappings for ransom, car theft—sometimes killing drivers in the process—hijacking fuel trucks and other activities. According to an April 2007 statement by their Islamic Army in Iraq rivals, AQI was demanding jizya tax and killing members of wealthy families when it was not paid. According to both US and Iraqi sources, in May 2008 AQI was stepping up its fundraising campaigns as its strictly militant capabilities were on the wane, with especially lucrative activity said to be oil operations centered on the industrial city of Bayji. According to US military intelligence sources, in 2008 the group resembled a "Mafia-esque criminal gang".
The first reports of a split and even armed clashes between Al-Qaeda in Iraq and other Sunni groups date back to 2005. In the summer of 2006, local Sunni tribes and insurgent groups, including the prominent Islamist-nationalist group Islamic Army in Iraq (IAI), began to speak of their dissatisfaction with al-Qaeda and its tactics, openly criticizing the foreign fighters for their deliberate targeting of Iraqi civilians. In September 2006, 30 Anbar tribes formed their own local alliance called the Anbar Salvation Council (ASC), which was directed specifically at countering al-Qaeda-allied terrorist forces in the province, and they openly sided with the government and the US troops.
By the beginning of 2007, Sunni tribes and nationalist insurgents had begun battling with their former allies in AQI in order to retake control of their communities. In early 2007, forces allied to Al-Qaeda in Iraq committed a series of attacks on Sunnis critical of the group, including the February 2007 attack 