I believe the picture was taken from an upper floor of the Rashid Hotel, the hotel used to house VIP vistors to Iraq and which is withing the Green Zone. More specifically the camera was pointing East-North East.

This BBC graphic of the Green Zone shows the location of the hotel. It is in the upper part of the zone and is indicated by the top tag in the image.

This a GoogleEarth image of the wider site shopwingthe intersection. The hotel is at the bottom of the picture and I suggest the photo was taken looking towards the top of this image:

I think the clincher is this closer shot of the grounds of the hotel which is again at the bottom of the picture. Note the larger store like buildings set among the trees. The three nearest the hotel are, I believe, the ones most prominent in the new Kaloogian photo. Note that there is a tree to the left of the group and another between the leftmost and the other two. In addition there are buildings at right angles to these which also appear in both images.

The Kaloogian picture.

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To make the co-incidences clearer I have merged two of these and linked those elements that seem to correspond with red lines.

As this is rather too small to make out properly, the lines from left to right link

1. A round feature that appears more yellow in the satellite shot

2. The rear one of two store-like buildings surrounded by trees on the three sides away from the camera.

3. The front store of these two.

4. A large tree that is prominant in the  hotel view

5. Two further "stores" with one set slightly back

6. Another building with a roof that appears to be damaged.

7. A set of buildings which seem to be in line with the hotel, staff quarters perhaps?

The blue building in the centre of the Kaloogian picture has been identified by AA in a comment at Eschaton as a police station hit by a bomb on 4 December 2005 {this is a correction of the previous "12 April 2005" which was an error due to different date systems in the UK and US.} A set of pictures from agencies is here.

This rather makes a nonsense of even the revised caption on his web site which now reads:

We originally posted a photograph not of Baghdad, Iraq but from Istanbul, Turkey where our delegation traveled on the way home to the United States. We apologize for this mistake. We have corrected it with a photograph we took from Baghdad. We took this photo of downtown Baghdad while we were in Iraq.  Iraq (including Baghdad) is much more calm and stable than what many people believe it to be.  But, each day the news media finds any violence occurring in the country and screams and shouts about it - in part because many journalists are opposed to the U.S. effort to fight terrorism.