REPORTER: Matthew Carney

I have come back to Iraq to see America's attempts at nation building. Since my last visit, just after the fall of Baghdad, security has worsened. On the road across the western desert, cars are regularly hijacked and looted. In Baghdad itself, after nearly a year of American occupation, anger and despair have increased. Packs of men roam the streets looking for jobs. Unemployment is at least 50%. This lot have been moving from ministry to ministry and under American administration they've found nothing.

FIRST ARAB, (Translation):
Let them give me wages or give me a job. I'm renting for 120,000 dinars but where can I get that money? The Americans have nothing to lose. They have the companies that can employ Iraqi people. Let them give us work.

SECOND ARAB, (Translation):
They're not giving us any chance. Iraqis have given up on the Americans. Now we know that their promises are lies. They came to occupy Iraq. They want to control the world, that's all. From Bush to the smallest soldier, they're liars.

At Iraqi hospitals it's not the shortage of electricity or medicines that people protest loudest about, but the lack of security on the streets. This Iraqi businessman, Fawzi Muidin, is visiting his injured son. For eight months he has been asking for American protection against Iraqi thugs who threatened to pillage his cement factory. They tried to kill him twice but eventually they got to his son Osama with a letter bomb.

FAWZI MUIDIN, (Translation):
Very dark. The future is still dark. Today is definitely better than tomorrow. So far, nothing has changed. The Americans only care about the safety of their forces, not the security of our society.

About 10,000 Iraqi civilians have died since America's invasion. The doctors say it's unlikely that Osama will live. Even with 130,000 American troops, Iraqis feel anything but secure.

It's graduation day for the second battalion of 700 Iraqi soldiers. They are just the beginning of a new Iraqi army created by America. These soldiers are a key part of a plan to scale back America's military presence and to start handing back sovereignty on 1 July.

GENERAL RICARDO SANCHEZ, COMMANDER US FORCES IN IRAQ:
It is definitely another step closer to Iraqis taking care of their own security and stability and we really appreciate that. We're proud of them.

They are celebrating now - many are happy to have a job and believe in rebuilding their country.

MAJEED, (Translation):
We suffered so many injustices... We have suffered a lot, so we joined to defend against terrorists, against criminals, against bombers...

But many Iraqis see them as collaborators enforcing American occupation. Their officers know it's going to be a difficult task to win the people's trust.

OFFICER, (Translation):
The people need more time. They need time to get used to this and we will cooperate together to bring security and peace to this country.

By September, America wants to have 20,000 in this new army. But even if this ambitious target is reached, it's doubtful American casualties will lessen as Bush heads for elections in November. But American plans have already suffered a setback. Half of the first battalion, nearly 400 men, deserted just as they were about to begin operations with US troops. They complained about pay and conditions. The commander in chief of US forces in Iraq, General Sanchez, says the problem is fixed. Their pay has been doubled.

GENERAL RICARDO SANCHEZ:
I think we have dealt with the problem and we have provided the right allowances at this point and all of the feedback we're getting is that it's satisfactory and adequate.

But clearly some in the 2nd Battalion are still not happy. 25-year-old Majeed says, the soldiers are being mistreated by their officers.

MAJEED, (Translation):
We want educated officers. A new military academy to turn out educated officers who know how to talk with us, treat us well.. we've suffered a lot, we can't take it any more.

To deal with this problem, the Americans have set up an officer training school in the north of the country. To get there, I hitch a ride on an American helicopter, the safest way to travel in Iraq. These Black Hawks are manned by spotters, who try to stop attacks. But they don't always succeed. The day before this flight, a Black Hawk went down killing all nine on board. 15 helicopters have been brought down in recent months.

Here at the muddy fort of Telefar, coalition officers such as Australian colonel Duncan Hayward are trying to instil democratic ideals into the future leadership of the new Iraqi army.

COLONEL DUNCAN HAYWARD, CHIEF TRAINER, TELEFAR CAMP:
If we are to have any longevity at this, rather than just build battalions of armed soldiers, we're focused on the leadership and trying to teach accountability, democratic control, no political alliance, de-Ba'athification, human rights, justice. So this symbol, or this map...

This is no easy task in a society where ethnic rivalries have been deliberately fanned for decades. But the trainers claim they are making progress.

COLONEL DUNCAN HAYWARD:
It's had its challenges. In the initial stages the soldiers had difficulty in coming to grips with "I must take orders from a Kurd and I'm an Arab." Or alternatively, "I must have Kurds serve underneath me." And we've found that as time goes on, they've built themselves into a team. They are more comfortable working along team groups as opposed to ethnic groups and they identify themselves as a platoon, as a company, as a battalion, as opposed to "I am Sunni, I am Shia, I am Kurd."

Creating a new Iraqi army is a massive undertaking made more difficult by an American decree last May to disband the entire old army. That left 400,000 Iraqis without a job or a future, angry at the American Administration. The Iraqi leader in this group, Brigadier Shattar believes this was a crucial mistake. He says to rebuild the country Iraq needs all the skills and experience it can muster.

BRIGADIER SHATTAR, (Translation):
Yes, there are officers who were Ba'ath Party members, who are experienced and served in the old Iraqi army. They are experienced and can be useful, not only in the army but in all areas. There are university professors and there are college teachers and professionals in many other fields who have their masters degrees or doctorates. Is a medical doctor unable to get a job because he was in the Ba'ath Party?

The reality is that as the new Iraqi soldiers take up positions alongside American troops, they will be attacked and killed. US forces have lost more than 500 soldiers, most since President Bush declared major combat over last May. This US military hospital is still busy dealing with the victims of 15 to 20 attacks American troops receive each day. This soldier was injured in a roadside bombing. But it's the Iraqis working with the Americans who are now being targeted more. The other two patients in this hospital, injured in a car bomb, are both Iraqis.

The vulnerability of Iraqis working with Americans is well known to Iraq's police force. This was Husseinyha Police Station in the outer suburbs of Baghdad. They're now trying to pick up the pieces and rebuild after a suicide car bomber killed eight policemen last December. Bakar Wahaib, the Iraqi police sergeant at Husseinyha, is trying to set up another headquarters with the little they have.

BAKAR WAHAIB, (Translation):
Is this an acceptable room for an interrogating officer? This cabinet is from the school. The bed is from the hospital. We also borrowed this one. This is very bad. I got this heater from my house but there's no electricity. There's only one desk. Only one.

Iraqi policemen are on the frontline in restoring order in Iraq, but Bakar says Americans are not providing enough support. He says the death of his men last December was in vain.

BAKAR WAHAIB, (Translation):
It hurts me a lot. They didn't compensate them at all. They died for nothing.

Remarkably they still go on patrol every day risking life and limb. They're still attacked regularly and on the day we're filming, we find out that the police station at the nearby town of Aquaba has been hit by a suicide bomber killing five.

For the insurgents trying to destabilise Iraq, the police are easy targets. They don't have proper weapons, communication systems or protective clothing like the Americans do. Bakar says he has 270 policemen ready to bring security to the area but he's still waiting for the Americans to deliver on their promises of support.

BAKAR WAHAIB, (Translation):
Promises but no action. Americans and others... people are dying in vain. We're young and we want to defend our country, to defend our land. We have no qualms about the Americans but we should build our country, not the Americans. We want to build our country and defend our people. They talk about support but there is none.

For Paul Bremer, the American charged with guiding Iraq to a stable future, the immediate problem is political - how to get the Shia majority to accept America's plans for the future Iraqi government. A key man in this process is Muwaffik Rubbaie. He is a Shi'ite and a member of the American-appointed Iraqi governing council and is the main link between the Americans and the Shi'ite leadership.
Rubbaie, back from 25 years of exile for his opposition to Saddam Hussein, is well aware of the challenges facing the country.

DR.MUWAFFIK RUBBAIE, IRAQ GOVERNING COUNCIL:
We inherited a ruined country, Matthew, a totally ruined country.

REPORTER: So you have a huge job, all of you, in front of you, don't you?

DR.MUWAFFIK RUBBAIE:
Absolutely and it's not going to take months, it's not going to take years, it's going to take probably decades, and I mean it, to bring back this country to the international level. And it's a huge job.

Four cars surround Rubbaie in a security cordon. His dozen bodyguards are always ready to avert an attempt on his life. So far he has survived at least two assassination attempts and a suicide bombing. Working with the Americans at such a high level means Rubbaie has one of the most dangerous jobs in Iraq.

DR.MUWAFFIK RUBBAIE:
Among this, you need to keep your sense of humour, you need to keep reminding - speaking to Ali myself and speaking to my guards and bring sort of some jokes otherwise you can't carry on.

REPORTER: So I mean have you got past the point where you worry about your personal security or not?

DR.MUWAFFIK RUBBAIE: Oh yes, yes.

REPORTER: You just have to forget about it and whatever happens happens. Yeah, yeah.

DR.MUWAFFIK RUBBAIE:
Exactly. See people like myself, who for the last 35 years have been working against this regime. We got something. This is a golden opportunity for us to rebuild the country. I normally said whatever happens, it will happen. This is the fate, this is my fate and I have to face it.

The main stumbling block for Rubbaie and the governing council is the American plan to hand back self-rule to the Iraqis. The Americans want regional forums and the governing council to select and appoint a transitional government by July this year, leading to elections in 2005. But the leading cleric of the Iraqi Shia, Grand Ayatollah Sistani, has repeatedly rejected this plan. He wants elections now. In recent weeks he has brought tens of thousands on to the Iraqi street to protest against the American plans.

Sistani has the power of the majority behind him - 60% of Iraqis are Shi'ites. And one of his representatives in Baghdad, Sayyid Guraifi, says Sistani has to be listened to, otherwise protest could turn into armed resistance.

SAYYID GURAIFI, (Translation):
If the Americans insist there will be no elections they will face two fronts. The first is to terrorist forces who will resist them, and those resisting them now will continue to resist them. The second front will be the forces demanding elections. If the Americans rejected the argument for elections then we would consider their stance as extremist against the Iraqi people. This will generate a reaction that is also extremist. This is a piece of advice. The Prophet said, "Religion is advice." The anger of the Shias is unbearable and its consequences are many.

As a religious leader, Sistani himself refuses to meet any American administrators, but he does meet with Rubbaie regularly. It's up to Rubbaie to find a compromise between the Americans and Sistani.

DR.MUWAFFIK RUBBAIE:
I think it is potential crisis but I think we will be able to find a compromise. He's still asking for a general direct election and, to be quite honest with you, I don't - I can't blame him for that. Election, whatever sort of election we have, is much better than selection. He wanted the people to take their fate to their own hands and that's what he's asking for.

Rubbaie thinks he can find common ground and Kofi Annan announced this week that the UN will become involved to see if elections are feasible this year - a key Sistani demand.

DR.MUWAFFIK RUBBAIE:
You can argue that the handing over sovereignty is too soon because the people of Iraq are not ready yet to rule themselves, but occupation is not something anybody deserves, especially the Americans, the British even, for that matter, Australians taking part in this. We can't accept the occupation to carry on. They are different in their religion, different in their culture, different language, different tradition. They don't understand our country, sovereignty.

Spending the day with Rubbaie is an insight into how Iraq functions and how Saddam Hussein's rule corrupted the Iraqi psyche. This man belongs to Rubbaie's tribe, and because of that he wants him to secure a job for him.

DR.MUWAFFIK RUBBAIE:
He's asking me to, if you like, to commit nepotism, and to interfere on his behalf to do something to, if you like, to give him an extra help in staying in a favoured place and that's the real problem. The corruption in the financial and administrative system is right to the core, not in the infrastructure, it's in the superstructure and every structure of this state. We inherited a huge problem and that's corruption in all aspects of life.

As such a crucial political figure, Rubbaie and his bodyguards are constantly on alert for assassination attempts. On his last stop for the day, a visit to the Free Prisoner Association, a shot was fired in our direction. The shot missed Rubbaie, but his bodyguards take no chances and head for the car. Rubbaie wants them to find the man. In other attempts on his life, the potential killer has never been identified. Rubbaie's guards secure the area before they go inside. They're ready for another attack.

Eventually, a guard working for the Free Prisoner Association is produced. He says he fired the shot but it was a mistake.

DR.MUWAFFIK RUBBAIE, (Translation):
Tell me, what happened exactly?

GUARD, (Translation):
I was keeping an eye on the side street. I was worried a car might come through... The side street... as usual.

DR.MUWAFFIK RUBBAIE, (Translation):
Did you know I was coming today?

GUARD, (Translation): We didn't know about it.

DR.MUWAFFIK RUBBAIE, (Translation):
Why did you cock your gun?

GUARD, (Translation): For your protection, sir.

DR.MUWAFFIK RUBBAIE, (Translation):
Fine, to protect us. What did you see? What did you see?

GUARD, (Translation): What do you mean...

DR.MUWAFFIK RUBBAIE, (Translation):
What did you aim at? Which direction did you aim?

GUARD, (Translation): Like that, sir.

DR.MUWAFFIK RUBBAIE, (Translation): At what?

GUARD, (Translation):
I had the safety catch on, I don't know how it happened. This way, sir. It was unintentional. I had my eye on the side street.

DR.MUWAFFIK RUBBAIE, (Translation): If you'd killed someone...?

GUARD, (Translation): Yes, my blood froze!

DR.MUWAFFIK RUBBAIE, (Translation):
With this mistake of yours, if you'd killed someone and the guys killed you, the guards would have fired back at them and there'd have been a battle resulting in 10 or 20 men being killed or injured.

In a country where everyone carries a gun, incidents like this can easily get out of control. This is the reality of being an Iraqi politician. Rubbaie will probably face more assassination attempts and next time he might not be so lucky. For the moment he accepts the guard's explanation.

GUARD, (Translation): What can I say? I don't know how it happened.

The other major problem for the Americans is the Sunni response to the occupation. Again Rubbaie is one of the key link men, meeting the Sunni sheikhs of Iraq to try and bring them in to the political process. Under Saddam Hussein and his Ba'ath Party, Sunni Muslims were a favoured minority ruling the country. They now have lost that privilege and feel alienated from American administration and its governing council. But Rubbaie's efforts may be too little too late.
Sunni Muslim groups across Iraq have set up their own state council. They have one aim - to get America out of Iraq.

FAKHRI AL QAISI, SUNNI STATE COUNCIL:
We take our legality for this political opposition from the occupation itself in addition that our religion, Islam religion, always calls to refuse any occupation, to refuse any ... destructive manner from anybody, even Muslim.

They say they are a political party fighting American rule and claim to have no connections with any military resistance. But the Americans don't believe that and broke up their first meeting at this mosque in late December, arresting 32 of their members.

FAKHRI AL QAISI:
We decided to make this meeting at 10 o'clock, at 10 and a quarter o'clock at morning, American troops come to this mosque and surround this mosque by about more than 50 or 60 tanks and other cars, more than 1,000 soldiers enter the mosque.

The group says the military resistance will continue and has nothing to do with Saddam Hussein, only with nationalist aspirations.

FAKHRI AL QAISI:
I know that the resistance related to a true people here, true original people because they refuse this occupation. Refusing of the occupation not related to Saddam or Ba'ath Party.

And that's something America has found out. The capture of Saddam Hussein has not ended the attacks against American troops. In response, the Americans have cracked down on the Iraqi population, conducting house-to-house searches, arresting hundreds and putting some areas under curfew. And that's not winning any hearts and minds, just creating more anti-American sentiment.

On my last day in Iraq, a suicide car bomb goes off at the main gate of the American headquarters. 25 were killed. It's difficult to see how America can nation build when it can't provide security and has little legitimacy. For the average Iraqi, life has got worse under American occupation. Later that day, I filmed the Iraqi Shia demonstrating against the French Government decision to ban the Islamic flag, but it quickly becomes anti-American.

CROWD, (Translation): No, no to America! We shall answer your call, O Muhammad!

It's also difficult to see how America can nation build when it's losing control of the political process. These people might have freedom of speech, but their vision of the future is not one America shares.


REPORTER: MATTHEW CARNEY
EDITOR: WAYNE LOVE
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