The main thrust of the attack on the Palestine hotel used three suicide vehicle bombs. The third vehicle, a cement mixer, didn't reach its goal. Fortuitously, the axle of the truck became entangled in concertina wire which prevented forward movement. If it had managed to get 20 feet closer to the hotel, there is a good likelihood that it would have killed hundreds and structurally damaged the building.The truck's entanglement also saved us from the next phase of the attack. There were guerrilla assault teams waiting in the wings to storm the hotel. These teams would have quickly overrun the hotel and taken dozens of hostages (mostly journalists and employees of private military companies). Given our experience with similar overruns in Saudi Arabia, this might have evolved into a 12-24 hour hostage drama in the heart of Iraq's global press operation. We were literally "saved by the wire" from this potential debacle (which would have been broadcast live to the entire globe). It could have become the moral equivalent of the Tet offensive or the bombing of the Marine barracks in Beirut.
This is the first time that several groups have combined to mount a major attack (we routinely see this with Caucasian guerrillas in Russia). Combinations have occurred in the past, but these operations have been mostly ad hoc and smaller in scope. This operation -- accomplished through a combination of al Qaeda in Iraq, Jaysh al-Mohammed (Baathist), and the Lions of Bara’a bin Malik (an al Qaeda affiliated group) -- demonstrates that Iraq's open source insurgency can now combine in ways to overcome the limitations of its decentralized structure. They were also able to demonstrate that they are capable of maintaining operational security on a large operation.
Here's what this means. Iraq's open-source insurgency can now mount operations with strategic implications (the attack on the Palestine, if it had succeeded, might have changed the course of the war). We can expect more efforts like this in the future, including an assault on a US military forward operating base. A successful attack on this scale (one that kills or holds hostage hundreds of US citizens) could turn public sentiment decisively against the war. The situation in Iraq has reached an inflection point and things are rapidly spinning out of control.