Hit them hard
The plan is easy!!
but guts are needed, cut them inside with only food going in, no one get out or in till they surrender all their weapons and the terrorists.
or give the civilians 48 hours to get out and then storm the city.
but Falluja is needed to be taken one way or the other
Falluja is the key
Falluja must get into the government's hand, for the terrorists it is their base for planning and staging their attacks, without Falluja it will be more difficult for them to maintain the resent level of insurgency. And they will be defeated sooner than letting them have Falluja for more time.
But on the other hand the Iraqi forces still ill equipped with AK's and pickup trucks, give them M16 and humvees, and treat them like they will be able to do it alone some day, not just using them to put an Iraqi face to the coalition operations.