"The war in Iraq and the large scale killing that is going on there, is making the youth emphasise the Islamic part of their identity."
This is false and misleading. I think it is more the fact that a) there are virtually no British born Imans meaning extremists from abroad have a monopoly on shaping the Muslim youth and

the British government has consistently welcomed radicals and refused to deport radicals in the name of 'freedom of speech'. A Sky News poll today showed that 91% of the UK Muslims asked thought the bombings were un-Islamic, 2% thought they were a positive thing. Many disagree with Iraq but it won't make them become suicide bombers, and the external terrorists are driven by a hatred of human life and freedom not individual events like Iraq.
" It is time for the British people to wind up their surrogate war in Iraq and come home."
This would just encourage more attacks, Blair would be saying that terrorism works if we were to withdraw troops. Besides, we need to stick with Iraq and deliver the democracy Iraqis voted for and not let the foreign insurgents set up another Islamic theocracy.
" In the attak on Fallujah ten of children perished and all one can say "bad luck. cllateral damage". "
The British army has never put bombs on public transport with the sole aim of destroying life. Innocents die in war but is highly naive to suggest to kill innocents is the intention of Western armies. If you are asserting this I find it highly offensive and you should withdraw any such statement.