2007-08-08 04:00:00 PDT Damascus, Syria -- The flood of more than 1.4 million Iraqi refugees, with as many as 10,000 pouring over the border each week, is pushing Syria to the edge, most observers say.

"The situation is starting to scare a lot of people," said Samir Taqqi, a political analyst at the Orient Center for Studies, a Damascus think tank.

Public services are deteriorating. State-run hospitals, inundated by tens of thousands of Iraqis seeking free medical care, are short on staff and medical supplies. Unable to afford serving cafeteria food, many are asking patients to bring their own.

At public schools across Damascus, the capital, overwhelmed teachers are forced to work double shifts to accommodate Iraqis pushing class sizes to as high as 70 students. Meanwhile, rolling power blackouts blanket the city for up to five hours a day because the country's electrical grid can't meet increasing energy demands during one of the warmest summers on record. Blackouts in some suburbs reportedly last up to 12 hours.

"The Syrian economy doesn't have the resources to sustain current subsidies for food and energy," said Taqqi.

Real estate prices also have risen sharply in the past year, while the government is forking out millions of dollars in subsidies to keep the price of bread affordable after drought conditions this year reduced cereals by an estimated 3.5 million tons. And rumors that the government will soon ration water has caused many Damascus residents to stockpile tap water.

The population explosion - the International Monetary Fund said Iraqis now make up 8 percent of Syria's population - plus U.S. economic sanctions and declining oil exports are stretching finances dangerously thin.

"You have a situation where the state hasn't been able to increase tax collection, which is causing bigger budget deficits," said Andrew Tabler, editor in chief of Syria Today, Syria's first English-language magazine.

Some analysts fear the current conditions are ripe for social unrest.

"You have all the same elements of Iraq's civil war now living in Syria's capital," said a senior government adviser who asked to remain anonymous because he is not authorized to talk to the media.

Increasingly, Iraqis are drawing the ire of many Syrians, who complain that indigent Iraqi laborers are taking jobs for lower-than-average pay and increasing unemployment, which hovers around 20 percent.

Criminal activity and Iraq's sectarian tensions are starting to spill over, with a marked rise in prostitution, rumors of Iraqis kidnapping Iraqis for ransom, and Sunnis and Shiites settling old scores.

Syrians and Iraqis increasingly speak about a growing presence of Iraq's sectarian organizations, including followers of the firebrand Shiite cleric Muqtada al-Sadr, who has set up an office in a Damascus suburb.

Abu Afaq, 59, a Sunni refugee and former military officer during the rule of Saddam Hussein, says agents of al-Sadr's militia, the Mahdi Army, have intimidated and spied on him in the Damascus suburb of Sayyida Zeinab, where hundreds of thousands of Iraqi refugees live.

"When I tried to go back to Baghdad, my cousin stopped me before I reached my old house because Sadr's men were looking for me," said Afaq, who asked to be called by a different name because he feared for his safety. "They knew I had left Syria, and if they caught me, would have killed me, for sure."

Syria and Jordan, which have taken in the bulk of the more than 2 million Iraqi refugees, have been clamoring for international assistance. Aid, however, has been modest and slow in coming.

The U.N. High Commissioner for Refugees has a budget of $67 million for the entire region, with $14 million earmarked for Syria this year. UNHCR, however, has increased its budget for its regional Iraq operation to $123 million.

The United States is reportedly devising a program to provide at least 7,000 Iraqis with American visas, but many remain skeptical.

"That number is a drop in the bucket," said Mtanios Habib, a former Syrian minister of petroleum. "America and the coalition created this problem, and they have done nothing to help."

At last month's meeting in Amman over Iraq refugees, the Jordanian government announced that the annual cost of hosting 700,000 Iraqi refugees approached $1 billion. Refugee inflows and a loss of subsidized oil from Iraq after the U.S. invasion caused inflation in Jordan to jump to 6.25 percent in 2006 from 1.6 percent in 2003, according to a study conducted by the Center for Strategic Studies, an Amman think tank.

Jordan also fears more acts of terrorism after the 2005 attacks against a wedding reception in Amman and two U.S. naval vessels in the southern port city of Aqaba. More than 60 people were killed - mostly at the wedding - causing the nation to tighten its border controls.

"Jordan awoke to the dangers of letting in large numbers of refugees after the wedding and Aqaba rocket attacks," said Paul Tate, a Jordan-based political analyst. "The official government line in Jordan is that they are still allowing Iraqis in, but it is widely suspected that they are not allowing in males between the ages of 18 and 40."

Syria, on the other hand, is the region's only country whose borders remain open. As a result, poor and uneducated refugees of all ages who can't afford the high cost of living in Jordan are streaming in.

"We have thousands of Iraqis who are getting in with fake passports and other false documents," said political analyst Taqqi, who added that many are also smuggled over the border. "Syria doesn't have the technology to monitor and inspect all of them to verify who they are."

Iraqi neighborhoods around Damascus have become so crowded that refugees are seeking shelter elsewhere, according to humanitarian relief agencies.

"We are starting to see migrations of Iraqis out of Damascus to cities located elsewhere," said Laurens Jolles, the UNHCR representative to Syria.

Jolles and other observers say this migration poses serious problems for relief efforts and for cities throughout Syria because they lack infrastructure to absorb large influxes of people.

"If this situation continues, and the government doesn't receive help, you could see drastic measures being taken soon," warned Jolles, indicating that authorities may soon clamp down.

"The time is coming when Syria will decide to deal much differently with refugees, both inside the country and with those wanting to come in," said Taqqi. "Almost all Syrians are opposed to having the Iraqis stay long-term - they don't want them to become the next Palestinians."