Jim Hanson gives a comprehensive review of the Haditha incident and the rules of engagement.

The charges have been dropped against all but one Marine so far and charges will likely be dropped against him too. There is no evidence that they committed a warcrime or violated the rules of engagement. The incident started when one marine was killed by an IED, followed by a small-arms fight in the town, then house-to-house fighting. The Marines killed a number of military-aged males and civilians. Hanson breaks down the incident step-by-step and considers the RoE and laws in war.

Mike Rentner’s comment sums it up:

But more importantly, strategically, they failed their mission by giving the insurgents more grist for the propaganda mill. Their role in Haditha was not only to kill insurgents, their role was to win the support of the people.