Kayz, your understanding is incorrect concerning the prohibition of killing non-combatants. Abdullah reported, "A woman was found among the killed in one of the battles of the Prophet, so the Messenger of Allah (Muhammad) forbade the killing of women and children." Further in another narration Muhammad said, "Do not kill a woman, nor a labourer." "Do not kill an old man, nor a child, nor a woman." Concerning the killing of Muslims aiding the US: anyone who aids the enemies of the Muslims is considered to have committed "radd" apostacy. And therefore, have taken themselves out of the fold of Islam. Just as someone who aids the enemies of the US is considered an enemy-combatant. Also, if one compares the news coverage concerning the casualities in Iraq it becomes apparent there is a gross disparity between how much attention is devoted to the subject between the international media (i.e. BBC, Arab news, Canadian news, European news) and the US media outlets. The US media doesn't come close to covering the casualities and the day-to-day life of the average Iraqi. If one were to believe the impression given by the American media, someone may be ignorant enough to think that most casualites are caused by the insurgents, which isn't even close.
What more do Muslims need to do? I'm not sure what rock you've been living under, but there has been an enormous campaign by Muslims condemning terrorism. Man, it amazes me that people are so out of touch with reality. But, where was the outrage over the 24,000 Iraqi civilians killed, and more than 46,000 maimed, mostly at the hands of the US troops?
Finally, concerning the advancement of the Muslim world. It would be interesting to note that Algebra, Geometry, much of what we know about has come from the Muslim world. The Oxford History of Islam states, "Science was an extensive cultural undertaking that occupied the minds and energies of many of the leading intellectuals in medieval Muslim societies. Indeed, science was practiced on a scale unprecedented in earlier or contemporary human history." Research your history, and provide evidence before you make ignorant statements.