"Shoot to kill is fine, in the USA" == "Shoot-to-kill is considered a fine policy, in the USA" == It's in the USA that the *considering* is done.
So, "Shoot-to-kill *Iraqis in Iraq* is, in the USA, considered a fine policy" == "Shoot-to-kill Iraqis in Iraq is considered a fine policy, in the USA" == "Shoot to kill is fine, in the USA".
So Peter's original unedited sentence *CAN* very fucking well be read as applying to shooting Iraqis in Iraq.
FYI, FWIW, QED, HTH, and all that. (No YMMV, though. 'Coz if it did, it'd be wrong.)