What political policies of Diem in particular lead to growing dissatisfaction with him and his regime among the South Vietnamese people and, eventually, the Americans as well?

Diem engages in a number of brutal and unfair policies which strip land from the local non-Christian farming population and awards it to fleeing Catholic refugees from North Vietnam. This, as well as a series of brutal crackdowns against Buddhist and student demonstrators that grow unhappy with this policy, eventually leads to his assassination.