  We have in earlier papers presented an extension of Mueller's dipole cascade
model, which includes subleading effects from energy conservation and running
coupling as well as colour suppressed effects from pomeron loops via a ``dipole
swing''. The model was applied to describe the total cross sections in pp and
gamma*p collisions. In this paper we present a number of improvements of the
model, in particular related to the confinement mechanism. A consistent
treatment of dipole evolution and dipole--dipole interactions is achieved by
replacing the infinite range Coulomb potential by a screened potential, which
further improves the frame-independence of the model. We then apply the model
to elastic scattering and diffractive excitation, where we specifically study
the effects of different sources for fluctuations. In our formalism we can take
into account contributions from all different sources, from the dipole cascade
evolution, the dipole--dipole scattering, from the impact-parameter dependence,
and from the initial photon and proton wavefunctions. Good agreement is
obtained with data from the Tevatron and from HERA, and we also present some
predictions for the LHC.
