Rebuilding funds being diverted to fighters

Money given to locals by the coalition forces in Iraq to fund rebuilding projects is being used to finance attacks against them, US army commanders have discovered.

Troops in hostile areas believe that community leaders sympathetic to Saddam Hussain are "skimming off" some of the grants of up to £58,000 meant for schools, police stations and clinics.

A senior commander in the Sunni triangle - an area containing many Saddam loyalists - is "convinced" that the coalition forces' money has reappeared in the form of rocket-propelled grenade and mortar attacks on his soldiers.

Lt Col Aubrey Garner, of 1-68 Armoured Battalion, based near the northern city of Balad, said: "when we go and rebuild a school, I am convinced that a certain percentage of the money we put in is being diverted to paying for attacks on the coalition."

Lt Col Garner voiced his suspicions during an interview with the Sunday Telegraph, in which he revealed the dangers and frustrations of policing the "redneck riviera", a rural area south-east of Balad that harbours some of the fiercest anti-coalition resistance.

It earned its nickname because of the large number of luxury homes overlooking the Tigris, many of which still shelter senior members of the Baath Party loyal to Saddam.

Together with sheikhs who enjoyed the former leader's largesse, they are thought to be using their own considerable wealth, boosted by well-intentioned American cash, to fund up to 150 fighters within a few sparsely-populated square miles.

Most residents, Lt Col Garner believes, do not support the movement. But tribal loyalty, together with uncertainty about the future, has made it hard for the coalition to win them over.

Since the battalion arrived in early July, the isolated attacks of the summer have developed into a constant, low-intensity guerrilla war. The battalion's civil affairs officer, Maj Mary Graf, has supervised the rebuilding of 14 schools, two medical clinics, and two water projects.

She has experienced similar frustrations. In some of the most hostile areas, US cash has been turned down point blank. "We try to focus on the highpoints - there are two villages, for example, that are very co-operative," she said.

"But it is frustrating. We really thought that we were coming here to liberate, yet here we find people who don't want to be liberated," she said.