There is an interesting piece of graffiti on a bridge near Basra. A fleeing militiaman has scrawled “We'll be back”; underneath an Iraqi soldier has scribbled in reply “And we'll be waiting for you”.

The Shia militias, the Jaish al- Mahdi, who controlled large parts of Basra until March this year, has now gone and instead the city is firmly under the grip of Iraq's new security forces, in whom the coalition has invested so much training. They re-established control in April, in an operation romantically named “The Charge of the Knights”, systematically clearing the city with British and American support, confiscating illegal weapons and arresting the violent gangs whose combination of criminality and vicious extremism was making life a misery for so many of Basra's people.

Around the city the posters of religious leaders are being replaced with billboards advertising cars and mobile phones and photographs of Nouri al-Maliki, the Iraqi Prime Minister, who is rightly credited with being the driving force behind the army's crackdown. You see the symbol of The Charge of the Knights everywhere, a black horse carrying the flag of Iraq trampling the gangsters underfoot.

This improvement in security has made Basrawis more confident of their future than at any time since 2003. A recent poll showed that only 8 per cent now regard security as their main concern; 80 per cent have confidence in the Iraqi security forces to protect them. Women are free to walk the streets uncovered and to wear Western dress should they so choose.

Yet what also makes people here so confident is that they know that they live in what is potentially one of the richest cities in the Middle East. They have both oil and natural gas. The “flare-off” I see from my window alone represents enough gas to heat a sizeable town. Then they have Iraq's major southern airport, in which we have invested heavily with them so that it is increasingly used by commercial airlines; you can now fly to Basra from London, changing in Amman. They also have Iraq's only ports. Last week they unloaded 24,000 tonnes at Umm Qasr port and every berth was full, double the traffic of just a month ago.

Most importantly, they have the people determined to realise this potential and, as one Basrawi businessman put it to me this week, to be a “Dubai, not a Mogadishu”. What they want and need now are international partners.

Basra is a surprisingly attractive city, built along the banks of the Shatt al-Arab waterway, laced with a series of canals, and affectionately known as “the Venice of the East”. Its city centre is one of the oldest and most beautiful in the Middle East. It has seen better days, after years of repression under Saddam and the recent fighting, but it is slowly recovering its former glory. The restaurants along the famous Corniche are reopening, and the streets and bazaars are buzzing. It has always been a cosmopolitan city, a mixture of races and religions where Sunni and Shia have regularly worshipped together, and with active Christian and Mandaean communities, it prides itself on having been the intellectual capital of Iraq.

Saddam did not just persecute Basra because he thought it was the centre of the southern insurgency against the Baathists, but because Basrawis showed an independence of thought that was inimical to his regime. Examples of the two sides of Basra's culture are now re-emerging. This week the city hosted a major Islamic conference, with many international representatives, and which emphasised unity and peaceful coexistence after the recent factionalism. And last month they were able to hold al-Murbad, the annual poetry festival, which had been a regular feature of life in Basra for centuries and which again attracts an international audience. The Basra diaspora, those intellectuals and professionals who left because of persecution by Saddam and the militias, are now returning. House prices have doubled since April and, in the more upmarket suburbs, have trebled.

It is a remarkable transformation, and it is largely due to the professionalism of the new Iraqi security forces. You will meet them everywhere in the city, accompanied by their British training teams, patrolling the streets, manning check- points and providing reassurance to people that the nightmare of the militias is over and that it is now their democratically elected government that is in control.

They are an impressive lot of young men, whom we have got to know very well as we live and work alongside them in their bases throughout the province. They believe in the new Iraq and, as their commander and my counterpart General Mohammed frequently tells me, they are determined never to become like “the army of Saddam”.

Some of those violent extremists who fled a few months ago will try to come back, but together the Iraqi and British armies are putting a security framework in place that will frustrate them. It will take a lot now to prevent Basra from realising its birthright. The Iraqi forces will, as that anonymous soldier scrawled, “be waiting for” anyone who tries to stop them.

Major-General Barney White-Spunner commands British Forces in Iraq and the multinational forces in Basra

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