The enemy is bottled up. Exits are through chokepoints and kill zones.
What chokepoints & kill zones? Just build a very tall, impermeable barrier around the entire place where these scumbags live, and fill the thing with water (or, since water may be scarce in the desert, gasoline).
Enough fornicating around with these savages - kill them, kill them all, and let the vast majority of average Iraqis get on with their lives.
Oh, and speaking of gasoline, we should gift some (a HUGE amount, actually) to Iran as a reward for helping the Mahdi "army" folks. I mean, its only right to help them out, since they've been so helpful to some of the citizens of our ally, Iraq. That Iran has a shortage of gasoline makes this an even better choice. Of course, my sources inform me that the best way to deliver gasoline to Iran, given certain transportation difficulties, is in jellied form and air-dropped. Delivering the gasoline directly to Iran's refineries will be advantageous, and also to lots of their government and military HQs, preferably simultaneously (we wouldn't want to hurt anyone's feelings by making them wait for a delivery, would we?).