& Debates - Propaganda?

My latest debate topic (registration required):

As part of an information offensive in Iraq, the U.S. military is secretly paying Iraqi newspapers to publish stories written by American troops in an effort to burnish the image of the U.S. mission in Iraq.

The articles, written by U.S. military "information operations" troops, are translated into Arabic and placed in Baghdad newspapers with the help of a defense contractor, according to U.S. military officials and documents obtained by the Los Angeles Times.

Many of the articles are presented in the Iraqi press as unbiased news accounts written and reported by independent journalists. The stories trumpet the work of U.S. and Iraqi troops, denounce insurgents and tout U.S.-led efforts to rebuild the country.

Though the articles are basically factual, they present only one side of events and omit information that might reflect poorly on the U.S. or Iraqi governments, officials said. Records and interviews indicate that the U.S. has paid Iraqi newspapers to run dozens of such articles, with headlines such as "Iraqis Insist on Living Despite Terrorism," since the effort began this year.

Los Angeles Times (found via Mac's blog)

So, couple questions for debate. First, is this propaganda, when it's factual? And in either case, is this acceptable practice (not poor ethics)? If yes, how do you handle the fact that the stories lie about their authors? If no, what do you have to say about the fact that the citizens would be less likely to trust (factual, in this case) news from the US-promoted government?