What do we do?

Okay, so I've been reading comments about Fallujah. The question comes up in a lot of places as to what do we do? Essentially, we've been kicked by a bully. At this point we, as a country, have a couple of options.

We can run home crying to our collective mommas. Bully wins.
We can cry foul and bring in a referee/teacher (the U.N.) to oversee the playground. Bully still feels that he's gotten away with it.
We can make sure that the bully doesn't do that to anyone else by severely kicking his butt. There's a bit in Ender's Game where Ender realizes that in order to keep from being killed by bullies, he has to make an example of one. He had to win the war right then and there. While I understand that this is an oversimplificaion of international politics and the Iraq occupation, I think we may be at a similar point. Eventually, when we're done kicking the crap out of enough bullies, the bullies will wise up. Or at least they'll be unable to fight us effectively.
While we may question the humanity or sanity of those who killed and mutilated those people in Fallujah, I feel that it's important for (especially AFTER this incident) for us to finish what we've started. If we cut and run, we're handing Iraq to these mobs (and Sadr) on a silver platter. Removing the tinhorn dictator was perhaps the main goal, (and a valid one considering the humanitarian benefits whether there were W.M.D.'s there or not) but we've got to make sure that another one doesn't come along to take his place.