When British forces took Basra on April 6, 2003, their artillery damaged a statue of an Iraqi soldier straddling a writhing shark. It was commissioned by Saddam Hussein to commemorate the end of the Iran-Iraq war in 1988. Looters have stolen the soldier.

But the shark, meant to represent Iran, remains.

The Islamic Republic's influence is indeed felt throughout Basra, Iraq's second-largest city where Shiite parties, militiamen, and criminal gangs all are locked in a vicious fight for power. The streets in the provincial capital are even abuzz with talk of Iranian-trained sleeper cells at the ready.

With the British exit earlier this month, which some analysts say is a prelude to the 5,500-strong contingent's complete withdrawal from Iraq, comes great uncertainty for this city: Will Iran bolster its strategic foothold? Will the Shiite militias control the streets? Is the Iraqi Army strong enough to mediate the fight between rival parties?

What happens here may provide a window on the future for the rest of Iraq.

This is a city that operates according to a fragile balance of military force, fear, cronyism, and business interests. All of Iraq is perilous. But the violence and fear in Basra takes place mostly outside the sphere of Sunni-Shiite killings. Al Qaeda is not a factor.

Basra is a predominately Shiite city, yet it is still imbued with fear of kidnappings, assassinations, and being caught in the wrong place at the wrong time.

This instability reveals that the violence in Iraq is not only sectarian or the result of insurgent activity, but is also caused by deep-seated political and tribal rivalries and an intense scramble for power.

"I came back to Iraq when the American and British tanks rolled in … things looked promising and we thought our dream of a democratic and tolerant state may materialize," says a university professor, who, like dozens of people interviewed by the Monitor during a recent trip to Basra requested anonymity for fear of retribution from militias. "The dream has been shattered. I feel trapped now and I am very pessimistic. I am looking for a way out."

The British say they can return if necessary. In a statement issued Sept. 5, Britain's Ministry of Defense said that despite the pullout they "still retain security responsibility" for Basra Province. They will hand over full control to provincial authorities by year-end.

"Troops will retain the capability to intervene in support of the Iraqi Security Forces should the security situation demand it," it said.

But should British forces decide to venture back, they will inevitably face a den of Mahdi Army fighters. During the occupation, Moqtada al-Sadr's militia made a habit of targeting the Hussein-era compound of palaces in the city center that had been the British base until its hand-over to the Iraqi Army earlier this month.

17,000 Mahdi Army militiamen

Billboards glorify Mahdi militiamen who died fighting the British. Streets carry their names. Upon the British departure, the Mahdi Army claimed victory. It had been leading the fight against the occupation since its early days. On Sept. 8, thousands of militiamen roamed the city center in vehicles and on foot brandishing Mr. Sadr's posters in what they billed as a "victory parade."

They are trying to "falsely claim credit for 'driving us out,' " says Maj. Mike Shearer, spokesman for the British forces.

In the fight between Shiite factions, Mr. Sadr's army has emerged as the most formidable force.

The militia is said to number 17,000 in Basra alone and is divided into 40 company-size military units, according to a senior Iraqi security official. Little is known about their local leader, Muntasir al-Maliki, who had replaced a commander killed by British forces in late May, except what's said about him having killed his own father a few years ago because he was an unrepentant supporter of the former regime.

They control multiple units in the 14,500-strong police force, and hold sway in hospitals, the education board, the university, ports and oil terminals, and the oil products and electricity distribution companies, says a Basra-based, Iraqi researcher.

There is no doubt of the militia's power. In an Aug. 24 meeting, witnessed by the Monitor, two Mahdi commanders pledged to a senior Iraqi security official not to attack British forces as they withdrew, in exchange for the release of 26 of their members.

Gen. David Petraeus, commander of coalition troops in Iraq, confirmed this in his testimony to the Senate on Sept. 11. And the Mahdi Army nationwide has been ordered by Sadr to freeze their activities for six months after intra-Shiite clashes in Karbala Province to the north of Basra in late August. But no one is sure whether that will be obeyed here.

"The issue of resistance depends on central decisions but this may change from place to place in Iraq depending on the conditions," says one Basra-based Mahdi Army commander, cryptically.

He boasts that the militia has rockets that possess a range farther than the air base, where British troops are all concentrated now, and that it controls vast weapons depots dating from the former regime that "will last us from here until eternity."

In fact, British forces said one of their soldiers was killed Sept. 5, just days after the withdrawal from the palaces, bringing to 42 the number of soldiers killed this year alone, compared with 29 in all of 2006.

The Iranian connection to the Mahdi Army, as US officials have insisted, indeed exists, says the Basra researcher. These Tehran-backed groups are often referred to in US military communiqués as "Special Groups."

The researcher says one form of support is free shipments of food from Iran that are then sold in markets. The proceeds, he says, are used to purchase arms in weapon markets in Mahdi Army strongholds in the city like Khamsa Meel (Five Miles) and Hayaniya.

"The [Sadrist] movement is basically a state within a state in Basra that is able to confront the occupation," he says. "No one dares say a word and no one really knows who's in control of the movement."

With the British largely now out of the picture, many expect the Mahdi Army to turn on its main rival – the Supreme Islamic Iraqi Council, known by Iraqis simply as "the Majlis," or council. It's the dominant Shiite party in the ruling coalition of Prime Minister Nouri al-Maliki.

300 assassinations

The council, previously known by its acronym SCIRI, and its affiliates were all based in Iran before Mr. Hussein's ouster. Its paramilitary unit, the Badr Brigade, was trained by the Iranians.

Badrists, as members of the Badr Brigade are known, now hold senior positions throughout central and southern Iraq as governors and commanders in the security forces. In Basra, a senior Badrist, Khalaf al-Badran, heads customs, after founding the police intelligence unit. All border crossings, including Shalamja to Iran and Safwan to Kuwait, are controlled by Badrists. Another top Badrist, Hassan al-Rashid, had been Basra's governor before losing out to Muhammad Mosabeh al-Waeli of the Fadhila Party in 2005.

Already the provinces of Maysan, Dhi Qar (Nasiriyah), and Muthana (Samawa), which had been handed over by the British-led coalition troops to Iraqis starting in 2005, have seen several episodes of pitched battles between the Mahdi Army and government forces beholden to Badr.

Last month saw the assassination of two top Badrists – Muthana Province Gov. Muhammad al-Hassani and Diwaniyah Gov. Jalil Hamza – with most fingers pointing to elements of the Mahdi Army.

"I expect the tit-for-tat assassinations to increase," says a Basra-based newspaper editor, adding that at least 300 partisans of Badr and its sister parties in the Supreme Council have been assassinated in Basra alone since the start of the year.

One resident of the middle-class neighborhood of Jazayer describes how he witnessed the drive-by shooting of a Badr official on his street on Aug. 19 that was promptly followed by the kidnapping, torture, and killing of a Mahdi Army operative in the same neighborhood.

"Facing the often invisible enemy, the terrorists that plague Basra, is not for the fainthearted," says Cpl. Ross Jones in a story posted last month by the British Army on the Ministry of Defense's official website.

God's Revenge

One Shiite party bears the brunt of charges by residents of Iranian influence: Thaar Allah, or God's Revenge. It's described by one Basra journalist as a "time bomb."

On a recent afternoon, the party's leader, Yousif al-Mussawi, stood in front of his SUV with its tinted windows in the courtyard of his headquarters. He spoke on a sleek mobile phone. The bearded Mr. Mussawi wore a shirt unbuttoned at the neck and black jeans. A large pistol was stuffed in his waist.

"Thaar Allah is a party founded by divine purpose," is scrawled on the outside wall. His party has a penchant for graffiti.

Heavily armed men in military fatigues guard the two-story building painted in deep green. In the hallways, men and women mill around waiting to see party officials for help in resolving disputes or landing government jobs.

Inside his office, Mussawi becomes slightly hostile when asked about the origins of his party. He finally relents and says that it started in 1995 as a guerrilla group that conducted operations against the former regime from its base in the marshes along the Iranian border. Mussawi, a former naval officer, was later imprisoned in Baghdad's infamous Abu Ghraib prison and was among the thousands released by Hussein in October 2002 ahead of the US-led invasion.

He does not hide his affection for Iran's supreme leader, Ayatollah Ali Khamenei, and says that his party desires to establish in Iraq a wilayat faqikh, a state ruled by clerics along the lines of Iran. But he denies any military or financial links to the Iranians.

Mussawi speaks of plans to expand his party's presence throughout Iraq including Baghdad and the need to fight all coalition forces until they leave. "Coalition forces are usurpers, plunderers, and occupiers and must be resisted … by force. I am doing that," he says, refusing to give details.

He rolls out a classified map of Basra prepared by the British military showing the level of violence in July. Asked how he obtained it, he says with a laugh, "They steal it for us."

He denies accusations made by his opponents that the party is bankrolled by protection money paid by wealthy traders including the Ashour family, which dominates the port of Abu Flous, south of the city. He calls the money he receives from these families "donations from party members."

Mussawi has bolstered his position by forging an alliance with what's known in Basra as the Bayet al-Khumasi, or the Pentacle House.

The Bayet al-Khumasi comprises the council and its affiliates the Badr Organization – the new name for the Badr Brigade – the Shaheed Al-Mihrab Foundation, the Sayed al-Shuhada Movement, and the Hizbullah Movement (no relation to Lebanese Hizbullah).

They all want to oust Governor Waeli.

The governor's dilemma

Mr. Waeli, who is a member of the Fadhila Party, is accused of mismanagement of public funds, corruption, and using the 15,000-strong oil facilities protection force, dominated by Fadhila partisans, in Basra and neighboring provinces as a paramilitary unit specializing in crude oil theft.

His enemies have a chant, making the rounds here on cellular phones, that derides Fadhila, which means virtue, as "Radhila," meaning sin.

Some of his detractors also charge that he's an agent for British forces and the Kuwaitis.

Fadhila follows the teachings of the late Muhammad Sadiq al-Sadr, Moqtada's father, but it does not believe the young cleric is fit to carry the Sadrist mantle. Fadhila leader Ayatollah Muhammad al-Yacoubi, one of the senior Sadr's disciples, has fashioned the party as a Shiite Arab Islamist party opposed to Iran.

This has made Fadhila's relationship with the Mahdi Army tense and put it on a direct collision course with the Supreme Council, the pro-Iranian heavyweight.

Waeli has accused Iran and the council of wanting to remove him because he tried to contain their influence and opposed a plan that would include Basra in a nine-province region friendly to Iran.

"In concert with its allies in Iraq, Iran wants to change the governor of Basra by hook or crook," says the portly Waeli, sitting in his enormous office. He has challenged a no-confidence motion passed by a majority of the provincial council members and a subsequent request by the central government that he quit.

"Arab countries have noticed my nationalist tendencies and have supported me," he adds.

Waeli regularly travels to Gulf Arab countries in what's billed as investment promotion trips.

Throngs of heavily armed bearded men in military pants and black shirts guard the perimeter of Waeli's provincial headquarters.

To up the ante against Waeli, Mussawi from Thaar Allah was tasked with organizing and leading a demonstration in April that degenerated into clashes. The governor himself took up arms to defend his office.

His rivals do not hide their desire for a super Shiite region comparable to the Kurdistan region in the north. They deny any military or intelligence links to Iran and say ties are economic and social in nature.

"Iranians are anxious to work with us, but the Arabs are absent and they keep labeling us as an extension of Iran. There is no truth to this," says Qassim Muhammad, a provincial council member from the Sayed al-Shuhada Movement, which was founded by Dagher al-Mussawi, a former anti-Hussein guerrilla fighter based in Tehran, who is now a parliament member close to Mr. Maliki.

Although Iran is closest to the council and its affiliate parties like Badr and Sayed al-Shuhada, it's also backing many other Shiite groups in southern Iraq including those that are openly using violence to oppose British and coalition troops, according to Ali Ansari, an Iran specialist at London's Chatham House.

"The Iranians are backing as many horses as they can," he says. "But there is a limit to their influence, given how fractious Shiites are in Iraq."

Baghdad's bid to control Basra

Amid this chaotic and dizzyingly complex picture in Basra, the central government has attempted to wrest control in this vital province which, with its oil exports, accounts for nearly 90 percent of Baghdad's revenues.

In June, one year after Maliki had declared a state of emergency in the province, he appointed Lt. Gen. Mohan Hafidh to head the Basra Operations Center (BOC), a body in charge of security in the province in coordination with the British. Iraqi Army forces under General Mohan's command were the ones that took over the palaces vacated by the British. The Army routinely sets up checkpoints now at night all over the city to try to curtail militia movements.

"The BOC and Mohan are the last hope for Basra and many parties want to see him defeated because they do not want to see their gains eroded," says Majid al-Sari, an adviser to General Mohan.

Maliki also appointed Maj. Gen. Jalil Khalaf to purge the police force of militias. He has already faced two assassination attempts and street protests as he seeks to fire unqualified officers, prevent policemen from using the force's vehicles when moonlighting as militiamen, and enforce a requirement that all policemen shave their beards.

"Criminal activity in Basra is a virus being nurtured by the police force's weakness and its multiple loyalties," the police chief told the Basra-based Al-Manara newspaper.

Few people, let alone the police force, can offer any explanation of the brazen crimes that occur in broad daylight such the theft Aug. 19 of an armored truck transporting nearly $1.2 million worth of funds belonging to the local agricultural board, according to an official with one of the city's main transport companies.

A group of doctors protesting in July the killing of two of their colleagues, possibly because they were former military doctors in the Hussein era, and the kidnapping of leading Basra surgeon Zaki Faddagh, were bluntly told by a provincial official to hire their own guards for protection, according to one of the protesting doctors.

Dr. Faddagh has left Basra after a ransom was paid for his freedom, and the doctor recounting the story says he now will sell all his belongings and leave Basra after his teenage son was kidnapped in August and held for two weeks. He was freed once a hefty ransom was paid. He says he has proof that policemen were aiding the kidnappers.

"If the British took their role as occupiers seriously and dealt with things firmly from the get-go, we would not have gotten to this situation," he says.

Britain's 'light touch'

Martin Navias, an analyst with Britain's Center for Defense Studies, offers a similar assessment. "The light touch [of the British approach here] has allowed various competing groups to gain ascendency in Basra, and Britain has very little control. We are really marginal there."

The British have been preoccupied with training the police and Army, ensuring that key supply routes from Kuwait are secure, and shielding themselves from an increase of attacks by militiamen. Otherwise, they left the competing Islamist parties and militias to their own devices.

British troops in Basra turned down repeated requests by the Monitor for interviews.

In a statement issued Friday, British Prime Minister Gordon Brown touted the training of 13,000 Iraqi soldiers as his Army's crowning achievement and said that full control of security in Basra would be handed to the Iraqis by the end of the year, with British forces assuming an "overwatch" role.

He said supply routes would continue to be protected by the British.

Asked on Wednesday if US troops may have to fill any void left by the British, General Petraeus said more Iraqi soldiers would be dispatched to Basra while American Special Operations soldiers would conduct pinpoint missions with their Iraqi counterparts as they did March 20, when they captured in Basra two senior leaders of the Mahdi Army and a Lebanese operative with the pro-Iranian militia Hizbullah.

Now, the Mahdi Army has put banners in Basra warning against "the secret US Army."

In his testimony in Washington last week, Petraeus called Iran's deepening influence in Iraq, particularly in the south, one of the most "unsettling" developments of the past eight months.

He said the various Islamist parties and militias have found a way to "accommodate" one another in order to keep Basra functioning.

"Interestingly there is an accommodation down there right now that is the kind of Iraqi solution to problems in the south that is mildly heartening, I guess is the way to put it," he said. "We are in a wait-and-see approach with Basra but we have every expectation that Basra will be resolved by Iraqis."