At this hour the streets of Sader City, a district of Baghdad, are mostly deserted, and electricity is sporadic. Nevertheless, as the half-dozen humvees and a truck wind their way through Sader's narrow streets, heads pop up over low mud walls and gates open narrowly as people gaze at the American soldiers, speculating on their mission.

If downtown Baghdad reeks of spilled fuel and diesel fumes, Sader City smells of shit -- puddles of sewer water from small to huge are scattered throughout the district's streets, somehow defying the blazing, parching sun. It's a smell I never get used to in a week of accompanying soldiers on patrol. Tonight our tires splash through the puddles, and as we near the destination the order is given to turn off the headlights. Four humvees block off the street as the other vehicles pull up to the building and soldiers spill out.

Immediately there's a problem: the wall in front of the building is at least nine feet tall, rather than the estimated six feet that the platoon rehearsed for. Nevertheless, four men quickly scale it, and training their weapons on the guards below, shout at them to open the gate. For a tense few minutes nothing happens -- the guards won't open the gate even though the scouts are threatening to shoot them. Luckily, no shots are fired, and the scouts jump down to open the metal doors; the Iraqi guards are pushed to the ground and cuffed as soldiers pour into the compound.

Doors are forced open and we enter a large room smelling of ink, and there it is: a printing press, surrounded with tall stacks of paper sheets, each one printed with 16 250-dinar notes, Saddam's face grinning up at us from the currency's design. I'm smiling too, since the printing press, the bills, the dim florescent lights, all look like a Hollywood set, the crooks caught red-handed. The soldiers pose for my camera, holding up the paper sheets of bills, joking about using it for wrapping paper.

Captain Brian Mescall, who's leading the operation, sends some men to alert the local Iraqi police, who'll take the guards into custody.

While we're waiting someone fires a gun from a nearby single-story rooftop. The bullet lands some distance from the soldiers blocking off one end of the street, but a dozen guns are quickly raised towards the roof and a translator hollers for the person to drop their weapon and stand up slowly. Nothing happens, but then we notice a huddled figure crawling into a small tent perched on the roof.

The front door is broken in, and soldiers quickly nab the shooter: a tiny old man, mostly deaf. He's the night watchman for a business; he'd heard noises and fired his gun at the street to frighten away thieves. He sits quietly on the curb, and seems confused by what's going on. Apologizing, the soldiers tell him not to fire at Americans, and escort him gently back up to his rooftop. I feel badly for him; he'll have to face the wrath of his employer over the broken door. Even for small things post-war Iraq is not a forgiving place.

At last the Iraqi police pull up in two new Caprices, smartly painted. Five or six cops jump out, and comically, after conferring with the Americans, stage their own raid on the already-raided building, dashing in with guns raised. The Americans are gathering up the evidence when it's noticed that three stacks of genuine 250-dinar notes that had been sitting with the other papers are gone. Capt. Mescall is furious and angrily chews out his sergeants for their carelessness.

Everyone knows that it was probably the Iraqi cops who took the bills -- the amount would be too small for a soldier to risk court-martial. Mescall decides not to press the issue. The army is nurturing the police force along to eventually take some of the burden off its shoulders, and he can't afford to humiliate the officers publicly. Nevertheless, the event illustrates perfectly why so few Iraqis have much faith that their own police can bring order to the country.

The three captured guards, who may not all have known what they were guarding, are to be taken to police headquarters. They're grim-faced, and one is visibly terrified -- he's peed on himself. I wonder if they're expecting a beating at the hands of the police.

The troops of 2nd Squadron, 2nd Cav are including the police on more of their raids, hoping to instill some sense of esprit, but they're not optimistic. On a recent raid a fedayeen operative opened fire and the cops dropped their weapons and ran. A soldier killed the man.

The 2nd Cavalry Regiment "owns" this district, which it patrols from four separate Squadron bases. Headquarters Squadron, which does the planning, is situated in Saddam's former Secret Police headquarters, initially taken by the Marines during the war in heavy fighting. It's a huge, grim cluster of spaceship-like concrete buildings which ring a small, evil-looking detention center in the middle.

2nd Cav is treating the detention center as a probable war-crimes site. You have to get permission to visit it. Capt. Kurley, the public affairs officer there, says he's done a lot of training with meditation and energy. "It took me a couple of months to go inside there. The first time I did -- I can't explain it -- I had to leave. There's some very intense, very bad energy in that place."

The walls inside the cells are covered in graffiti scratched into the paint. One of the mysteries of the jail is that there are several cells where all the graffiti is in Cantonese. Some of the officers claim that Chinese laborers built the center and were subsequently imprisoned in it. Throughout the prison the 2nd Cav has translated bits of graffiti in Arabic and Cantonese.

When I asked you how much sadness you have, as much as the river flows to the East.
The wildflower doesn't stop growing, the wind of the spring,
Everything comes back to life.

Bechtel Corporation is the contractor, and the company is hiring Iraqi subcontractors for jobs ranging from sewer and electrical upgrades to painting and repairing schools. The subcontractors often aren't reliable, and when new cable is laid down, people come in the night to dig it up and get the copper wire. I've seen huge bails of looted copper wire for sale in the markets, which the soldiers confiscate when they come across it on patrol.

Whenever a patrol stops it's quickly besieged with curious and bored children, desperate to attract the soldiers' attention. Their incessant cries of "Mister! Mister! Mister!", repeated no matter how much you ignore them, becomes oppressive. They surge forward at you, more joining the screaming crowd every minute, so often the Americans are forced to put up concertina wire to keep them back. Yet many of the children are heartbreakingly beautiful, and their unselfconscious smiles are disarming.

They assure us that everything is fine, until we're about to leave, when a man named Ali suddenly claims that fedayeen are trying to kill him where he lives. Baird is interested, and eventually agrees to accompany the man to his house. We drive along the narrow street, just wide enough for the humvees, carefully clearing the low-hanging pirated electrical wires criss-crossing everywhere.

When we arrive at his house neighbors rush to their gates to see what's happening; soon there's a crowd pressing in from the street. In the small, dimly lit first floor patio. It emerges that we've stumbled into a family feud. A tough, thick-set woman swathed in her black abaya is shouting at the man we brought in, ignoring the efforts of a group of men from the family to silence her. Our translator can barely keep up with her.

"He brings shame on the whole family! He leaves his wife, he won't go to work! He stays out late drinking in the street! Others, they come to say: 'Why is your boy behaving so? What can you do to stop this behavior?' His problems reflect on the family. He must leave our family now or we won't take responsibility for what happens to him!" She's drowned out by the fierce voices of the men, now.

Neighbors, edging in through the front door, are giving their opinions. I notice, in the light, that Ali's face is red from booze; he seems stricken, about to cry. Baird tries in vain to get control of the situation, ordering his men to push out the strangers. He can't seem to fathom how deep and pitiless these feelings are, the righteous indignation directed against the sinner who dishonors the family. He appeals to the crowd:

"Look, can these two please be polite with each other? I want these two to talk and settle their differences, him and the woman. . . ." He's interrupted: "Take him, take him with you if you want him to stay alive! Take him, tell him to walk straight and be polite!"

Baird tries to explain that in his country, too, there are black sheep. It's something, he says, that everyone has to face, with newfound freedom. He's getting nowhere. I'm not even sure that the translator is following what he's saying. It seems like he's lost his grip on authority here, when he drops a small bomb:

"I'm afraid that we can't help you, so we'll have to call the police to settle this, and bring the boy into the station for his own protection."

Now there's an uproar. Ali, looking panic-stricken, is firmly escorted to the door by the soldiers, when he bolts back into the house. Everyone is shouting, the neighbors are again pressing into the door. It seems the one thing everyone can agree on is that they don't want the police involved. Baird regards this as some type of reconciliation, and his soldiers breathe a sigh of relief when he finally orders everyone back to their vehicles to continue patrolling.

"Yeah, that's perfect," says one soldier. "We'll carry signs that say: Go Home, Me!'"

Michael confirms that the UN has essentially left altogether, and that most NGOs have followed suit. It seems that western reporters are next on the hit list. Further, he says, there are currently 15 attacks a day on coalition forces in Baghdad. His co-worker Eva claims that the U.S. is under-reporting casualty figures. Michael, who says he'll stay here no matter what happens, is clearly preparing himself for the worst.

The next day I'm talking with Naseer Hasan, the poet, at the Shabandar Teahouse. I tell him my worries and he shakes his head. "No, it's not like that. I am actually very hopeful. I will tell you why."

"What do you hear from the Shi'ite of Najaf? Kill the Americans? Have an Islamic state, like in Iran? No. They are not so happy about the Iranians; Iran played a dirty role in Iraq after the war. The Iranians said nothing about the crimes of the Saddam regime. In Najaf they are no longer saying that the Americans are responsible for the death of Hakim [the assassinated Shi'ite leader]. His death actually changed many peoples' minds towards his views. Hakim did not claim an Islamic republic which, in any case, is not very suitable for democracy.

"In the office where I work we used to have some people who say: 'The Americans destroyed our country, things were better before.' Now when these people talk others tell them they are wrong. You know about the opinion poll recently: 67 percent say that the hardship is worth it to be rid of Saddam. Maybe more important, only 8 percent say they prefer Saddam. I can tell you that more Iraqis are believing in the fight of the U.S., that you are with us.

"There may be battle ahead, between the extremists and those who want peace and stability. This is not necessarily bad: if it has to happen, then better it should happen now. We are ready for it. The important thing is that the attitude of the people has shifted after all the attacks, the bombings. The bomber thought to divide the people, Shi'ite against Shi'ite, Iraqi against American. In reality, the opposite has happened. Now we know this is about a democracy or chaos."

Naseer was born in Sader City, and grew up there. He was a sensitive kid, and perhaps some of the toughness and directness of his personality was forged on those rough, stinking streets. His views give me hope, because in the end, the battle for a new democratic Iraq will have to be won by the Iraqis themselves, with the help of whomever is there at their side.