  We continue our study of the reduction of PEL Shimura varieties with
parahoric level structure at primes p at which the group that defines the
Shimura variety ramifies. We describe "good" $p$-adic integral models of these
Shimura varieties and study their 'etale local structure. In this paper we
mainly concentrate on the case of unitary groups for a ramified quadratic
extension. Some of our results are applications of the theory of twisted affine
flag varieties in our previous paper math.AG/0607130.
