General reaction? Extreme anger. The Iraqis heard for months about abuse and torture against both men and women in Coalition hands, but most didn't believe it. Now they don't know what to believe, but the pictures they *DO* know are true have opened the door to all sorts of other pictures and stories which are even more horrific, albeit highly questionable. The Iraqis don't really believe there will be any real justice in this case, and many of them want a public trial... some even want these cases to go before a war crimes tribunal. They don't seem to believe that this is just an isolated incident, in large part because more cases keep being reported in the world press. Amnesty International has documented approximately 30 other incidents of torture, abuse, and murder, and I myself have read accounts from U.S. servicemen who have mentioned soldiers in other units who have beaten Iraqis.
Maybe that's part of the problem. It happens, but it's always someone else's unit. And maybe it's completely unrealistic to expect it to not happen too. This is a war, after all, and when people are (or might) be trying to kill you and your buddies, it makes you pissed off, and mercy is probably the last thing on your mind.
Frankly, maybe the situation is such that we can assume that there will always be another accusation of an unconscionable act against the Iraqis, and always another Iraqi who is set upon revenge, no matter what the U.S. military does or doesn't do -- whether the allegations are true or not. I feel sympathy for those serving over in Iraq, who must feel immensely frustrated and powerless over such accusations. No matter how much they do, no matter how good they are, does it matter? All I can say is yes, it does. Even if the U.S. leaves Iraq and everything goes to hell, individual acts of kindness and mercy matter. They may make all the difference to you someday as to whether Iraq was worth it.
Maybe it isn't the Iraqis who should hope for a merciful, benevolent occupier... maybe it is the U.S. who should hope for forgiveness and mercy from the Iraqi people. If the situation were reversed, I am not certain that they could expect the same from us.