Reagan says he doesn't have anything personal against Bush. He met him only once, at a White House event during the Reagan presidency. "At least my wife insists we did -- he left absolutely no impression on me. . . ."

But Reagan has strong feelings about Bush's policies, including the war in Iraq, which he ardently opposes. "Nine-11 gave the Bush people carte blanche to carry out their extreme agenda -- and they didn't hesitate for a moment to use it. I mean, by 9/12 Rumsfeld was saying, 'Let's hit Iraq.' They've used the war on terror to justify everything from tax cuts to Alaska oil drilling."

Of course, Reagan's father was also known for his military buildup and aggressive foreign policy. "Yes," he concedes, "there are some holdovers from my dad's years, like Elliott Abrams and, my God, Admiral Poindexter, who's now keeping watch over us all. But that observation doesn't hold up. My father gave a speech a couple years after he left the White House calling for 'an international army of conscience' to deal with failed states where atrocities are taking place. He had no thought that America should be the world's policeman. I know that for a fact from conversations I had with him. He believed there must be an international force to intervene where great human tragedy was occurring. Rwanda would have been a prime example, where a strike force capable of acting quickly could have gone in to stop the slaughter.

"Now George and Dick and Rummy and Wolfy all have a very different idea about America's role in the world. It was laid out by [Deputy Secretary of Defense Paul] Wolfowitz back in '92 -- Iraq is the center of the Middle East, its axis, and it's of such geo-strategic importance that we can't leave it in the hands of Saddam. We need to forcibly change that regime and use Iraq as a forward base for American democracy, setting up a domino effect in the region, and so on. My father, on the other hand, was well aware of the messiness of the Middle East, particularly after [the 1983 bombing of the Marine barracks in] Lebanon."

Reagan says his opinions about the war were not changed by the rapid fall of Baghdad. "Look, whether or not Saddam was a bad guy, or whether the Iraqi people were terribly oppressed, was never the issue. I mean I'm happy for the Iraqis, but that's not what this was all about. Nor was the military conclusion ever in doubt; this was the Dallas Cowboys playing a high school team. Their army was a third the size it was in '91, and it didn't give us much trouble then.

"And the weapons of mass destruction? Whatever happened to them? I'm sure we'll find some," he laughs. "They're being flown in right now in a C-130."

Iraqi demonstrators poured out of Friday prayers in Baghdad mosques chanting anti-US slogans and calling for an Islamic state to replace Saddam Hussein's toppled government.

A recording was played over US army loudspeakers, warning people in Arabic to leave the area "immediately or there will be consequences".

At one mosque, Sheik Ahmed al-Kubeisy rejected the troops' "occupation" and said US soldiers should leave the country soon, before Iraqis expel them, the Arab news channel Al-Jazeera reported.

The Iraqi opposition today consists of exiled liberals and generals, Kurdish nationalists, Shiite and Sunni clerics, Islamic fundamentalists, a smattering of monarchists and the unknown local leaders throughout the country who have quietly provided comfort to opponents and passive resistance to Saddam Hussein's totalitarian regime. From other regime changes, we should assume that this united front against Hussein will no longer be united after Hussein. The combination of a weak state, soaring expectations in society and factional fighting in the anti-authoritarian coalition gives rise to two dangerous "solutions." One is restoration. Living in anarchy, people want order. Who can provide order most quickly? Those who previously provided order. How can order be provided most quickly? By deploying the same methods used before. For both American officials governing Iraq and the Iraqi people, the temptation to settle for a new regime led by new leaders with autocratic proclivities grafted onto old state structures from Hussein's regime will be great.

But there is another, more sinister solution that can also gain appeal: the victory of the extremists. The end of dictatorship is a euphoric but ephemeral moment. When the new, interim government does not meet popular expectations, the radicals offer up an alternative vision to construct a new political (and often social) order. It is amazing and frightening how often they win. In February 1917 the end of Russian czarism seemed to create propitious conditions for constitutional democracy. Less than a year later, the Bolsheviks had seized power. In 1979 the first provisional government in Iran contained many prominent leftist intellectuals and even some liberals. No one today, however, remembers Mehdi Bazargan or Abol Hassan Bani-Sadr, while everyone knows the name of Ayatollah Ruhollah Khomeini, the radical cleric who pushed these others aside to dictate his vision for Iran. The Taliban seized control in Afghanistan to end the years of anarchy after the collapse of the old order there.

In Iraq, this threat from revolutionaries -- that is, the terrorist wing of Islamic fundamentalism inspired by Osama bin Laden -- is now latent and below the radar screen, but real. For devotees of this world perspective, Iraq offers a ripe opportunity. Not only is the old state gone and expectations high, but the only authority in the country is, in their revolutionary discourse, an imperial occupying force of infidels. Vladimir Lenin and Khomeini would have drooled over such propitious conditions for revolution.

The third path between restoration and revolution is a long and bumpy one. Liberal, moderate grass-roots movements from below always take more time to emerge and consolidate than the autocratic forces of either restoration or revolution. To succeed in Iraq, they will need their U.S. allies for the long haul. Premature departure guarantees thugs in power at best and Osama bin Laden supporters at worst.

Tony Blair is facing the threat of a fresh rebellion from Labour backbenchers who are growing increasingly alarmed that the failure to uncover weapons of mass destruction in Iraq will confirm that the war was illegal.

As a 1,000-strong Anglo-American task force of inspectors prepares to search hundreds of suspicious sites, Labour MPs are demanding an inquiry to establish whether MI6 misled ministers about Iraq's weapons programme. . . .

MPs are also starting to ask questions about the conduct of the intelligence services. They want to see the evidence that persuaded members of the Commons intelligence committee to back government efforts to win round waverers before the war began. One MP is telling committee members: "You kept saying you wished you could tell us, so now will you tell us?" . . .

The doubts about Iraq's WMD programme mean that some Labour MPs will be sceptical even if a 'smoking gun' is uncovered. Mr Hinchliffe said there was a "cynical view" among Labour MPs that the coalition inspectors will doctor the evidence.

Britain wants to reassure critics by appointing an international body on the lines of the Northern Ireland disarmament commission to verify any weapons finds.

But the former cabinet minister Gavin Strang said the coalition should go all the way by allowing UN inspectors back into Iraq. "I do not understand why we have not been able to allow Hans Blix to go back in," he said.

In addition to their oil, much of our security relationship with the Saudis has been based on our need to project force against and counterbalance Iraq and Iran. With the Iraqi government out of the picture, our need to counterbalance them disappears. And if you want to project force against or counterbalance Iran, Iraq is a much better place to do it from than Saudi Arabia.

What this adds up to is that most, if not all, of our geostrategic interest in Saudi Arabia evaporated over the last month. If the Saudis give us grief or won't cut off terror money to various bad-actors we have a much freer hand to squeeze them. . . .

Now, combine all this with the fact that many in the Bush administration (and out of the Bush administration, for that matter) think that Saudi Arabia is the ground zero of international terrorism, the terror purveyor state par excellence. To this point, our ability to muscle the Saudis on the terror question or even undermine the regime itself has always been limited by our need for their assistance geostrategically. But if the administration gets what it wants in Iraq, all of that changes.

The United States is planning a long-term military relationship with the emerging government of Iraq, one that would grant the Pentagon access to military bases and project American influence into the heart of the unsettled region, senior Bush administration officials say.

American military officials, in interviews this week, spoke of maintaining perhaps four bases in Iraq that could be used in the future: one at the international airport just outside Baghdad; another at Tallil, near Nasiriya in the south; the third at an isolated airstrip called H-1 in the western desert, along the old oil pipeline that runs to Jordan; and the last at the Bashur air field in the Kurdish north. . . .

A military foothold in Iraq would be felt across the border in Syria, and, in combination with the continuing United States presence in Afghanistan, it would virtually surround Iran with a new web of American influence. . . .

These goals do not contradict the administration's official policy of rapid withdrawal from Iraq, officials say. The United States is acutely aware that the growing American presence in the Middle East and Southwest Asia invites charges of empire-building and may create new targets for terrorists.

So without fanfare, the Pentagon has also begun to shrink its military footprint in the region, trying to ease domestic strains in Turkey and Jordan.

In a particularly important development, officials said the United States was likely to reduce American forces in Saudi Arabia, as well. The main reason for that presence, after all, was to protect the Saudi government from the threat Iraq has posed since its invasion of Kuwait in 1990.

Exasperated US military officials tried to hamper the media from covering new demonstrations in Baghdad on Tuesday while some 20,000 people in the Shiite Muslim bastion of Nasiriyah railed against a US-staged meeting on Iraq's future.

The protests came as the Americans delivered a first progress report in their effort to restore Iraq to normalcy and head off a chorus of criticism over continued lawlessness and a lack of basic services.

Some 200-300 Iraqis gathered Tuesday outside the Palestine Hotel, where the US marines have set up an operations base, for a third straight day of protests against the US occupation.

For the first time, visibly angered US military officials sought to distance the media from the protest, moving reporters and cameras about 30 meters (yards) from the barbed-wired entrance to the hotel.

"We want you to pull back to the back of the hotel because they (the Iraqis) are only performing because the media are here," said a marine colonel who wore the name Zarcone but would not give his first name or title.

Tony Blair has ruled out an inquiry into allegations that the public was misled about Saddam Hussein's alleged weapons of mass destruction, the main justification for the war.

Putting himself at odds with a growing number of MPs, the Prime Minister said there was no need for a separate inquiry as a 1,000-strong Anglo-American inspection team prepares to search Iraq for weapons.

Meanwhile a cross-party alliance is getting behind the campaign for an inquiry to be conducted by the House of Commons Intelligence and Security Committee into whether MI6 misled ministers about WMDs, and into the exact nature of the intelligence information used to convince waverers in the Labour Party to back military action. The campaign is unlikely to win Downing Street's co-operation. . . .

Alice Mahon MP, a prominent member of Labour Against the War has added her support to calls for an inquiry. She joins fellow Labour MPs Lindsay Hoyle -- who voted in favour of war because he was told there was "hard evidence" of an Iraqi weapons programme -- David Hinchliffe and Doug Henderson, the former Defence minister, who warned that the war would retrospectively be deemed illegal if no weapons were found.

Ms Mahon said she would be calling for the United Nations, and not the US, to send inspectors to Iraq. "There is cynicism about the US," she said, "and a number of people have said this to me: they will find them [WMDs] because they will take their own in there with them. That was the reason we went to war, so let's get it verified."

While not opposing the idea of a Commons inquiry, the Liberal Democrat foreign affairs spokesman, Menzies Campbell, said he believed the Government should go further and push for the United Nations weapons inspectors, led by Dr Hans Blix, to be allowed back into Iraq.

Mr Campbell told The Independent on Sunday: "Any inquiry held in the UK or the US will inevitably be accused of bias. The only credible approach is to allow Dr Blix and Unmovic to complete the mandate the UN Security Council gave them under Resolution 1441. Only the United Nations will be trusted."

The Conservative Party, too, has backed the broad principle of an inquiry to find out whether the evidence presented to ministers and to members of the Intelligence and Security Committee was an accurate reflection of the situation on the ground in Iraq. They also called for the UN to be allowed back in.

The United States came under strong regional pressure yesterday to hand over power in Iraq to a post-Saddam government that was not a mere puppet regime of Washington and London.

The demand, an important theme of a meeting of Iraq's neighbours in Riyadh, Saudi Arabia, emerged as Colin Powell, the US Secretary of State, confirmed that he would soon travel to Syria. He said he would read the riot act to the President, Bashar al-Assad, over the alleged shelter provided for members of the former Iraqi regime and pursuit of chemical weapons. . . .

[T]he Bush administration's pressure on Syria appears, if anything, to be producing a counter-reaction in the region, fuelled by worries that hawks in Washington will manipulate the formation of a new Baghdad government to ensure that it is friendly to Israel. . . .

The eight participants included not only Washington's traditional allies -- Turkey, Egypt, Jordan, Kuwait, Bahrain and Saudi Arabia -- but Syria and Iran, both longstanding opponents of the US, which are both accused of supporting terrorism.

With the exception of Turkey, which wants to put the reconstruction of Iraq at the top of the agenda, the other countries have set aside longstanding quarrels to press for the emergence of a genuinely independent Iraqi government as soon as possible.

Hans Blix, the chief United Nations weapons inspector, returns to the Security Council this week -- not to update the member nations on the hunt for weapons of mass destruction in Iraq, but rather to pile pressure on the United States to let the UN back into the post-war reconstruction process. . . .

[A]lthough Mr Blix probably won't be saying "I told you so" when he addresses the Security Council on Tuesday, he will at least speak with some authority when he urges the military victors in Iraq to let the UN back in and help certify that, post-Saddam, the country is indeed free of biological, chemical and nuclear arms.

"I think the world would like to have a credible report on the absence or eradication of the programme of weapons of mass destruction," he told the BBC last week. "We would be able not only to receive the reports of the Americans and the Brits of what they have found or not found, but we would be able to corroborate a good deal of this."

The United Nations has several ways it can take advantage of the growing controversy over Iraq's illegal weapons programmes -- or lack of them. One is simply to reassert the authority of the inspection team and to point out its usefulness as an independent arbiter. The clear implication of Mr Blix's interview was that the US, on its own, cannot report credibly and should not have the right to dictate its terms. As he also said last week: "We're not dogs on a leash."

Another possible strategy stems from the wording of the Security Council resolution on economic sanctions on Iraq. The sanctions can only end, Resolution 687 says, if the UN certifies the country to be free of illegal weapons. Several countries, notably Russia, have suggested this clause could be used as leverage to give the UN a more significant role in post-war Iraq.

The Bush administration is busy looking for ways to end the sanctions without this UN imprimatur. The Iraqi people "have suffered enough", the Deputy Secretary of Defence, Paul Wolfowitz, argued -- a line that is not without irony, since for years the United States insisted that sanctions were not responsible for Iraqi suffering, Saddam Hussein was.

On Friday there was an invisible line of demarcation between greater Baghdad and the residents of Sadr City -- a place where US patrols are absent, as are the Iraqi capital's awkward new police. Its boundary marks the greatest failure of the US intervention in Iraq thus far: the failure to tackle what may be the most potent challenge to US plans for a Western-style democracy in Saddam's collapsed demesne.

Because, for all its poverty and danger, Sadr City may be the very model of the new Iraq that America is making. It has a population that is turning to its clerics, not to the political exiles who are flooding back and demanding that they be handed the reins of power.

And on Friday Sadr City belonged emphatically to the hundreds of armed men of the Sadr Movement's militia and to a second group loyal to the rival Grand Ayatollah Ali Sistani, both bearing arms in open defiance of the US troops who have flooded into the city.

They are gunmen who on Friday not only manned their impromptu checkpoints at city junctions and outside the main hospital, but lined every rooftop along the main road that led to the al-Heqma mosque, and mingled with the crowd. These hundreds of armed men exerted their presence as tens of thousands of worshippers came to listen to messages delivered across the city's mosques.

. . . So that is the bizarre story of how neoconservatives took over Washington and steered the U.S. into a Middle Eastern war unrelated to any plausible threat to the U.S. and opposed by the public of every country in the world except Israel. The frightening thing is the role of happenstance and personality. After the al-Qaida attacks, any U.S. president would likely have gone to war to topple bin Laden's Taliban protectors in Afghanistan. But everything that the U.S. has done since then would have been different had America's 18th century electoral rules not given Bush the presidency and had Cheney not used the transition period to turn the foreign policy executive into a PNAC reunion.

Plans to build a pipeline to siphon oil from newly conquered Iraq to Israel are being discussed between Washington, Tel Aviv and potential future government figures in Baghdad.

The plan envisages the reconstruction of an old pipeline, inactive since the end of the British mandate in Palestine in 1948, when the flow from Iraq's northern oilfields to Palestine was re-directed to Syria.

Now, its resurrection would transform economic power in the region, bringing revenue to the new US-dominated Iraq, cutting out Syria and solving Israel's energy crisis at a stroke.

It would also create an end less and easily accessible source of cheap Iraqi oil for the US guaranteed by reliable allies other than Saudi Arabia -- a keystone of US foreign policy for decades and especially since 11 September 2001.

Until 1948, the pipeline ran from the Kurdish-controlled city of Mosul to the Israeli port of Haifa, on its northern Mediterranean coast.

The revival of the pipeline was first discussed openly by the Israeli Minister for National Infrastructures, Joseph Paritzky, according to the Israeli newspaper Ha'aretz .

The paper quotes Paritzky as saying that the pipeline would cut Israel's energy bill drastically -- probably by more than 25 per cent -- since the country is currently largely dependent on expensive imports from Russia.

US intelligence sources confirmed to The Observer that the project has been discussed. One former senior CIA official said: 'It has long been a dream of a powerful section of the people now driving this administration [of President George W. Bush] and the war in Iraq to safeguard Israel's energy supply as well as that of the United States.

Why, Iraqis are asking, did the United States allow the entire Iraqi cabinet to escape? And they're right. Not just the Beast of Baghdad and his two sons, Qusay and Uday, but the Vice-President, Taha Yassin Ramadan, the Deputy Prime Minister, Tariq Aziz, Saddam's personal adviser, Dr A K Hashimi, the ministers of defence, health, the economy, trade, even Mohammed Saeed al-Sahaf, the Minister of Information who, long ago, in the days before journalists cosied up to him, was the official who read out the list of executed "brothers" in the purge that followed Saddam's revolution -- relatives of prisoners would dose themselves on valium before each Sahaf appearance.

Here's what Baghdadis are noticing -- and what Iraqis are noticing in all the main cities of the country. Take the vast security apparatus with which Saddam surrounded himself, the torture chambers and the huge bureaucracy that was its foundation. President Bush promised that America was campaigning for human rights in Iraq, that the guilty, the war criminals, would be brought to trial. The 60 secret police headquarters in Baghdad are empty, even the three-square-mile compound headquarters of the Iraqi Intelligence Service.

I have been to many of them. But there is no evidence even that a single British or US forensic officer has visited the sites to sift the wealth of documents lying there or talk to the ex-prisoners returning to their former places of torment. Is this idleness. Or is this wilful? . . .

At the end of the Second World War, German-speaking British and US intelligence officers hoovered up every document in the thousands of Gestapo and Abwehr bureaux across western Germany. The Russians did the same in their zone. In Iraq, however, the British and Americans have simply ignored the evidence. . . .

The top security men in Saddam's regime were busy in the last hours, shredding millions of documents. I found a great pile of black plastic rubbish bags at the back of one villa, each stuffed with the shreds of thousands of papers. Shouldn't they be taken to Washington or London and reconstituted to learn their secrets? . . .

Now here's another question the Iraqis are asking -- and to which I cannot provide an answer. On 8 April, three weeks into the invasion, the Americans dropped four 2,000lb bombs on the Baghdad residential area of Mansur. They claimed they thought Saddam was hiding there. They knew they would kill civilians because it was not, as one Centcom mandarin said, a "risk free venture" (sic). So they dropped their bombs and killed 14 civilians in Mansur, most of them members of a Christian family.

The Americans said they couldn't be sure they had killed Saddam until they could carry out forensic tests at the site. But this turns out to have been a lie. I went there two days ago. Not a single US or British official had bothered to visit the bomb craters. Indeed, when I arrived, there was a putrefying smell and families pulled the remains of a baby from the rubble.

Remember Colin Powell at the Security Council two months ago (though today it seems another age on another planet): the charts, the grainy intelligence satellite pictures, the crackly tapes of the intercepted phone conversations among Iraqi officials? How plausible it all sounded, especially when propounded by the most plausible figure in the Bush administration.

And what about those other claims, wheeled out on various occasions by Messrs Bush, Blair, Cheney and Rumsfeld? The Iraqi drones that were supposed to be able to attack the US east coast, the imports of aluminium tubes allegedly intended for centrifuges to enrich uranium, the unaccounted-for lethal nerve and germ agents, in quantities specified down to the last gallon or pound, as if exact numbers alone constituted proof. All, it seems, egregious products of the imagination of the intelligence services -- one commodity whose existence need never be doubted.

Maybe the Saddam regime was diabolically cunning in the concealment of these weap-ons, but the shambolic manner of its passing suggests otherwise. Maybe, as those "US officials" continue to suggest from behind their comfortable screen of anonymity, the weapons have been shipped to Syria for "safekeeping". But that theory too is dismissed by independent experts.

Indeed, it collapses at the first serious examination. Why should Saddam part with his most effective means of defence, when the survival of his regime and himself was on the line? Nor will that hoary and disingenuous line advanced by our political masters wash any longer -- oh yes, we know a lot more, but if we told you, we would be showing our hand to Saddam and endangering precious intelligence sources. . . .

Well, Saddam is now gone. And with him has disappeared any conceivable risk to those intelligence sources (assuming they ever existed). So just what was this information on the basis of which Washington and its faithful ally launched an unprovoked invasion of a ramshackle third world country? A country with a very nasty regime to be sure, but not a great deal nastier than some other potential candidates for "liberation" in the Middle East and elsewhere.

If only for the credibility and reputation of our country, this newspaper hopes that enough weapons of mass destruction will be discovered to justify a war that has grievously weakened the UN, strained the Atlantic alliance and split the European Union.

Confronting cost estimates of at least $20 billion a year and fears that Iraq could become permanently dependent on a U.S. military presence, senior officials in the White House and Pentagon are questioning the Bush administration's most ambitious, long-term plans for Iraq's reconstruction. . . .

Such sentiments mark a departure from the lofty goals laid out within the administration and before the American public before the war began -- goals that a chorus of think tanks and former diplomats is imploring the administration to carry out. Still, the debate over what happens next is far from settled, with some powerful administration officials, especially in the Treasury and State departments, arguing for a longer-term commitment. . . .

Such hedging is likely to exacerbate differences between the minimalist camp and some State Department officials, who still believe the United States should set its sights on spending whatever time it takes to create a true, pluralistic democracy with a thriving, entrepreneurial economy. . . .

Treasury Department officials are also thinking big, hoping to encourage the adoption of a codified system of property rights and a rule of law for business operations, a transparent system of budgeting and taxation, the promotion of an entrepreneurial economy and, ultimately, the privatization of centrally planned state enterprises. . . .

White House aides stress that Iraq is not a destitute country, like Afghanistan. Besides its oil reserves, the second-largest in the world, it has an extensive transportation, water, electricity and telecommunications infrastructure, an educated population and a recent history of entrepreneurship and relative affluence.

Pentagon officials take a very different tack, emphasizing that Iraqis have grown accustomed to intermittent electric power, unreliable and decrepit water and sewerage systems, and a terribly inefficient state-run economy.

From those disparate assessments, however, flow the same conclusion: Not much needs to be done to improve the average Iraqi's lot.

Mohammed Mohsen Zubaidi, a longtime Iraqi exile . . . has proclaimed himself governor of Baghdad . . .

Zubaidi, a Shiite Muslim dissident who has spent the past 24 years in exile and is a top official of the opposition Iraqi National Congress, said he was selected last week by a 22-member council of businessmen, clerics and intellectuals to run this city of 5 million people. Although his name elicits befuddled stares on the streets of Baghdad and his appointment has not been recognized by the U.S. military, he insisted he is the city's new leader.

In the uncharted political landscape that is today's Iraq, Zubaidi has moved with alacrity to stake out turf. Over the past week, he said, he has met with doctors and judges, urging them to return to work. He has talked to police commanders and former soldiers, telling them that the corrupt old days are over. He has reached out to tribal leaders, providing them with power generators, medicine and other goodies to curry their favor. And he has met with U.S. military officers, casting himself as a key interlocutor with what remains of the Iraqi government.

His power-grab may not last if it meets with the objection of the U.S. government, which is establishing an interim civil authority led by retired Army Lt. Gen. Jay Garner. But there are signs that Zubaidi's activities may have at least the tacit approval of some U.S. officials. The Iraqi National Congress has received substantial financial backing from the Pentagon, and his top deputy is a member of an exile militia trained by the U.S. military. . . .

In a news conference . . . Zubaidi said the country's new constitution would be derived from Islamic law and promised to prosecute anyone whose "hands are stained with the blood of the Iraqi people."

He insisted that his was not "a transitional government."

"We are an executive committee to run Baghdad," he said. He added that 22 subcommittees had been formed to administer the capital and that "professional people" had been appointed to lead them.

When the British cobbled together Iraq out of three provinces of the collapsed Ottoman empire, they were deliberately fractionalising and diluting two of the three main demographic groups. It made good colonial sense to split up the ever-troublesome Kurds (Sunni Muslims, but not Arabs) between Syria, Turkey, Persia, and Iraq. Equally, the Shias had to be prevented from dominating the new state. In her letters home, Gertrude Bell, an archaeologist and official of the British administration in Baghdad after the first world war, described the Shias as, variously, "grimly devout", "violent and intractable", "extremist", "fanatical and conservative". By contrast, the Baghdad Sunnis were seen as generally docile, forward-looking and pro-British. A representative democracy was out of the question, because the majority Shias would promptly hijack it. Bell wrote: "I don't for a moment doubt that the final authority must be in the hands of the Sunnis, in spite of their numerical inferiority, otherwise you'll have a mujtahid-run, theocratic state, which is the very devil." . . .

From the start, the unwieldy assemblage of Iraq needed not a government but a ruler. When monarchy failed, tyranny of a peculiarly Middle Eastern kind took over. Rosen interestingly asserts that the idea of "state", in the western sense of a complex machinery of government independent of the person of the ruler, barely exists in the Arab world, because an entity as abstract and impersonal as a state cannot be credited with those "bonds of obligation" that define and constitute the Islamic self. This is borne out by fundamentalist websites that warn their followers not to vote in western elections for fear of committing the sin of shirk, or blasphemy: to show allegiance to a secular state, instead of to the Ummah and to Allah, is to worship a false god. The typical Arab ruler is likely to echo Louis XIV: the state, such as it is, is him -- a warlord-like figure on a grand scale, with an army and a secret police at his disposal, like Nasser, Hafez al-Assad, King Saud, or Saddam Hussein. For the individual strong man is compatible with strict Islamist teaching in a way that a strong state is definitely not.

In the case of Iraq, arrogant colonial mapmaking happened to conspire with Islamic tradition to create a state that would permanently tremble on the verge of anarchy, or at least of violent partition into a Kurdistan to the north, a Shi'ite theocracy to the south, and a Sunni-led secular statelet in the middle with Baghdad as its capital. That Iraq still conforms -- just -- to its 1921 borders is a tribute to the extraordinary power and brutality of Saddam. Yet Wolfowitz has singled out this state-that-never-should-have-been for his breathtakingly bold experiment in enforced American-style democracy. On April 6 he went the rounds of the Sunday-morning talk-shows to "warn" the nation that it might take "more than six months" to get Iraqi democracy up and running. He should be so lucky. What seems to be happening now is that, as American troops take full possession of Iraq, they are beginning to find out -- in Baghdad, Ur, Mosul -- that the country they invaded has effectively ceased to exist.

Because the Iraqi regime is so impenetrable and in constant flux, its behaviour, or lack of it, causes problems of circularity. Motivated by the legitimate need to make sense of their observations, "experts" attempt to interpret seemingly straightforward noises and signals from within Iraq. Saddam's mercurial regime produces a lot of these, albeit fragmentary and contradictory. Interpreting them means overstatement, and this adds to the ambiguity of the actual signals. Foreign observers acting in good faith then play into the hands of an inscrutable, unpredictable regime. And the essentially false analyses get the media cover.

United Nations officials have rebuked British commanders for urging local residents to loot buildings belonging to the Iraqi Army and the ruling Baath Party.

The British view is that the sight of local youths dismantling the offices and barracks of a regime they used to fear shows they have confidence that Saddam Hussain's henchmen will not be returning to these towns in southern Iraq.

One senior British officer said: "We believe this sends a powerful message that the old guard is truly finished." . . .

But UN officials said last night that such behaviour was against the Geneva Convention and bred a dangerous mood of anarchy. Homes and vehicles in towns such as Umm Qasr and Safwan, which have nothing to do with Saddam's regime, have been robbed and vandalised in recent days; a UN official attributed that to the permitted level of lawlessness. One said: "The British and American armies have a duty to protect local law and order. It is not right that they promote the idea that it is permissible to steal or destroy anything owned by the Iraqi Government, their army and their party leaders.

I begin to feel like I was in the last generation of Americans who took a civics class. I begin to feel like most Americans don't understand the First Amendment, don't understand the idea of freedom of speech, and don't understand that it's the responsibility of the citizen to speak out. . . .

When I write a political column for the Chicago Sun-Times, when liberals disagree with me, they send in long, logical e-mails explaining all my errors. I hardly ever get well-reasoned articles from the right. People just tell me to shut up. That's the message: "Shut up. Don't write anymore about this. Who do you think you are?"

Almost 70% of the world's currency reserves -- the money that nations use to finance international trade and protect themselves against financial speculators -- takes the form of US dollars. The dollar is used for this purpose because it is relatively stable, it is produced by a nation with a major share of world trade, and certain commodities, in particular oil, are denominated in it, which means that dollars are required to buy them.

The US does very well from this arrangement. In order to earn dollars, other nations must provide goods and services to the US. When commodities are valued in dollars, the US needs do no more than print pieces of green paper to obtain them: it acquires them, in effect, for free. Once earned, other nations' dollar reserves must be invested back into the American economy. This inflow of money helps the US to finance its massive deficit.

The only serious threat to the dollar's international dominance at the moment is the euro. Next year, when the European Union acquires 10 new members, its gross domestic product will be roughly the same as that of the US, and its population 60% bigger. If the euro is adopted by all the members of the union, which suffers from none of the major underlying crises afflicting the US economy, it will begin to look like a more stable and more attractive investment than the dollar. Only one further development would then be required to unseat the dollar as the pre-eminent global currency: nations would need to start trading oil in euros.

Until last week, this was already beginning to happen. In November 2000, Saddam Hussein insisted that Iraq's oil be bought in euros. When the value of the euro rose, the country's revenues increased accordingly. As the analyst William Clark has suggested, the economic threat this represented might have been one of the reasons why the US government was so anxious to evict Saddam. But it may be unable to resist the greater danger.

Last year, Javad Yarjani, a senior official at Opec, the oil producers' cartel, put forward several compelling reasons why his members might one day start selling their produce in euros. Europe is the Middle East's biggest trading partner; it imports more oil and petrol products than the US; it has a bigger share of global trade; and its external accounts are better balanced. One key tipping point, he suggested, could be the adoption of the euro by Europe's two principal oil producers: Norway and the United Kingdom, whose Brent crude is one of the "markers" for international oil prices. "This might," Yarjani said, "create a momentum to shift the oil pricing system to euros."

If this happens, oil importing nations will no longer need dollar reserves to buy oil. The demand for the dollar will fall, and its value is likely to decline. As the dollar slips, central banks will start to move their reserves into safer currencies such as the euro and possibly the yen and the yuan, precipitating further slippage. The US economy, followed rapidly by US power, could then be expected to falter or collapse.

As the administration plotted to overthrow Hussein's government, U.S. officials said this week, it failed to fully appreciate the force of Shiite aspirations and is now concerned that those sentiments could coalesce into a fundamentalist government. Some administration officials were dazzled by Ahmed Chalabi, the prominent Iraqi exile who is a Shiite and an advocate of a secular democracy. Others were more focused on the overriding goal of defeating Hussein and paid little attention to the dynamics of religion and politics in the region.

"It is a complex equation, and the U.S. government is ill-equipped to figure out how this is going to shake out," a State Department official said. "I don't think anyone took a step backward and asked, 'What are we looking for?' The focus was on the overthrow of Saddam Hussein."

Complicating matters is that the United States has virtually no diplomatic relationship with Iran, leaving U.S. officials in the dark about the goals and intentions of the government in Tehran. The Iranian government is the patron of the Supreme Council for the Islamic Revolution in Iraq, the leading Iraqi Shiite group. . . .

U.S. intelligence reports reaching top officials throughout the government this week said the Shiites appear to be much more organized than was thought. On Monday, one meeting of generals and admirals at the Pentagon evolved into a spontaneous teach-in on Iraq's Shiites and the U.S. strategy for containing Islamic fundamentalism in Iraq.

Tony Blair took repeated secret advice from the former American president Bill Clinton on how to unlock the diplomatic impasse between Europe and the US in the build-up to the war on Iraq, the Guardian can reveal.

In the crucial weekend before to the final breakdown of diplomacy in March, Mr Clinton was a guest of Mr Blair's at Chequers where the pair discussed the crisis.

Mr Blair was battling to persuade the Chilean president Ricardo Lagos -- a key figure on the security council -- to back a second UN resolution setting a new deadline for Saddam to cooperate fully with the UN or face military action.

Three days after his Chequers meeting, Mr Clinton made a rare public appeal to his successor, George Bush, to give the UN weapons inspectors more time.

Mr Blair and Mr Clinton met at least three times to discuss the war, underlining the extent to which Mr Blair rates Mr Clinton's analytical powers, despite the bond of trust he has also formed with the Republican White House.

There is not one U.S. plan to create an interim Iraqi government but, rather, two competing ones--one backed by the Pentagon, the other by the State Department and the National Security Council (NSC)--and this bureaucratic infighting is sowing confusion, delaying reconstruction, and leaving the political field largely open for the worst kind of anti-Western, anti-democratic leaders to rise.

For his part, Deputy Secretary of Defense Paul Wolfowitz is pushing a plan that would rapidly establish a new government by merging a council of Iraqi leaders elected by exiles at a March conference in the northern Iraqi city of Salahuddin with "internals," the Bush administration's term for Iraqis that have endured Saddam's tyranny (see "The Wasteland," page 18). The NSC and the State Department, on the other hand, would like to sponsor a series of town meetings with internals and exiles--like the one held outside of Nasiriya in Ur on April 15--culminating in a large conference in Baghdad, in the hope that Iraqis on the inside, rather than exiles, will emerge as viable leaders for the transitional regime. . . .

With every week that passes, the United States could be losing the battle for influence on the ground. In Najaf, Sayyid Muqtada Sadr, the heir to perhaps the most prestigious clerical line in Shiism, drove his religious rival into hiding by threat of force. In the eastern city of Baqouba, militias trained by Iran's Revolutionary Guard stormed into the city last week and executed men they accused of being Baathists. And Iranian intelligence agents have reportedly already infiltrated the Shia neighborhoods of the Iraqi capital and are organizing Islamist parties. We can only hope the Bush administration establishes an interim authority before they do.