The only way to counter this is to take out the garages and eliminate the supply of men and materiel. In many cases, this is a matter of civilian support. If the locals do not support the insurgents (as is the case in most of Iraq) then they can't set up shop. In places like Tikrit, Baathist sentiments still run deep. Most people will a bombmaker next door won't say a word.
Eliminating foriegn support is also crucial. Syria and Iran continue to fund, arm and supply the insurgents, as well as provide havens for high level facilitators. It's the old 'political sensitivities' thing that prevents us from hitting back, and they're playing it to the hilt.
Still, the biggest obstacle to peace is the fact that there are still civilians that support the insurgency. Sometimes they do so directly, but often by their silence alone. Once they are persuaded to turn the bad guys in, the resistance will evaporate. In the Shiite and Kurd areas that are far from the Sunni neighborhoods, there is little to no insurgent activity. That's no coincidence.
"The problem is that there is no good defense against suicide bombers, aside from banning cars altogether. Once the a willing shaheed has left the garage in a rigged vehicle, he's pretty much guarenteed to kill people."
If strange bad people are driving into my neihgbor's yards and blowing them up, they damn well will not be driving into my yard unless I authorize it. Otherwise, they will be met with overwhelming lethal force the instant they get into my imposed saftey zone where I feel threatened.