Armed propaganda is a term used in security circles to refer to particular violent actions, usually carried out by an insurgent or terrorist group, designed more for their psychological impact than because of their inherent value to the cause of the group. When the Taliban plant a few dozen IEDs and kill several American soldiers, this is standard insurgency; when they launch spectacular co-ordinated suicide attacks on government facilities, this is armed propaganda.
Insurgents or terrorists adopt their particuar tactics because they have a better chance of achieving their goals through sporadic, low-level violence than they do through direct engagement with the enemy. If someone occupies your country, then you make sure they pay a cost for it in lives until eventually they decide the cost is too great and they leave. If there are a lot of them, then all the better: there are more targets for you, and their occupation is costlier. Tactical defeats, or a series of them, can turn into strategic routs if you demoralize the occupier enough. This is the logic behind low-level insurgencies, and it allows them, over time, to achieve their objectives by engaging the enemy directly.
Armed propaganda is subtly different. It is designed to make occupying forces and their domestic allies - for instance, the Afghan state based in Kabul and its military - look weak and fragile, and to make the insurgents or terrorists look strong. Armed propaganda is a show of force which might not significantly degrade the enemy's military, but which scares the shit out of him. The bigger and bolder the better. Al-Qaeda's attack on the Iraqi finance and foreign ministries in central Baghdad this week is a perfect example. Blowing large truck bombs up outside these ministries didn't appreciably hurt the Iraqi state, or degrade its forces; the terrorists don't have the power to do that on a meaningful scale. Instead, they were trying to send a message: we can strike anywhere, anytime. Be worried.
Actions such as this are more effective than killing dozens of Iraqi soldiers in some godforsaken corner of Anbar province because they are an affront to the feelings of security and normality that ordinary citizens cherish. This is why they are acts of propaganda: they are designed more for their psychological effect than their military impact. They are supposed to make ordinary citizens think that the state is weak and cannot defend itself, and to make them despair of ever achieving normality. A series of these acts has an insidious impact on people's trust in the state and the security forces, and makes a mockery of the institutions that the terrorists want to discredit. Lacking the ability to defeat their enemies in one-to-one combat, they try to demoralize them and sap their support through armed propaganda.
Armed propaganda is a particular favourite of al-Qaeda because it allows them to incite their favourite type of strife: ethnic. Once people start to lose faith in the state's ability to protect them, they start having to protect themselves through militias; it was this vicious security dilemma which led to the Iraqi civil war spiralling out of control, and it is a process that al-Qaeda desperately want to start again in Iraq. Armed propaganda can create a general atmosphere of chaos which is conducive to further chaos, creating a self-fulfilling prophecy as everyone scrambles to assure their own security because they can no longer trust anyone else with it. This general discrediting of authority is a prerequisite for any terrorist or insurgent group that wants to destroy a powerful state.
Armed propaganda acts as what is called a force multiplier. Insurgents and terrorists might be few in number, but if they can consistently carry out high-profile attacks which scare people and disrupt their lives, then they can have a disproportionate impact. Terrorism is often an essential part of this process because it demonstrates the resolve of the terrorist to stoop to any moral low point to achieve his goals; this again acts as a force multiplier because it makes him much, much scarier. Like in the story of Keyser Söze, one man who is willing to do anything is much scarier than ten acting according to accepted norms.
If terrorists can commit theit outrages often enough, and the authorities are apparently embarrassingly incapable of stopping them, then soon enough people will tire of the violence and want to reach an accomodation with the terrorists just to stop the killing. Armed propaganda is designed to make people think they have no other choice.