The Iraqis obviously have some serious command and control issues that keep cropping up -- failing to wire the oil terminal in Umm Qasra and now failing to blow the bridges on the Euphrates, all things that would slow the advance.
I expect they intend to simply fight in the city against the siege where the overwhelming U.S. advantage in mobility is lessened. But they may be making an different error here -- we also have a tremendous advantage in firepower, which will be concentrated by their choice to defend in this manner. Obviously, they wish to play the PR game war of "you are criminals killing civilians". I expect that their ability to broadcast this message will be removed entirely once Baghdad is invested fully.