While I think it possible that NATO fails in Iraq, I do not think it will be the fall of NATO.
Also the problem of terrorism (and others) is caused mainly by intolerance. It is true 60% of Iraqis are Shiites, 40% are Sunnites (give or take a few "other"), but on top a significant part of the latter are Curds - there we have not religious separation, but ... how do I say, not racial - but "tribal" separation. And Curdistan expands into Turquie and Iran ...
The reasons for most wars (IMHO) can be reduced to either power addicts, profiteers or religious (cultural) fanatism. Should HUMANITY be able to control this - wishful thinking; would I trust any one human or even nation to be able to do that - certainly not.
Is a balanced majority of nations (be it UN, EU, NATO, or else) a possible solution? Maybe - but certainly not a fast one, because of endless discussions bartering pride, advantages, cost, priviledges...
Is there an alternative???