When the Assaf family came home a year after fleeing the isolated village where they had lived for decades, they were justifiably nervous: at the height of Iraq's violence, the two sons had been threatened with murder and Mohammed, the father, had seen a fellow Sunni shot dead in the street in front of him.

With security finally improving they decided, like an increasing number of Iraq's 2.7million internally displaced people, to risk it. The decision was not an easy one. Jabala is in an area known as the Triangle of Death, for years a battleground between al- Qaeda's Sunni extremist gangs and al-Mahdi Army's Shia death squads.

Driving into the village, an act that in itself would have been a suicide mission for Western journalists even a year ago, all seems well at first sight. The Assafs are a Sunni family — although the mother, Balkees, is Shia — and get on well with their Shia neighbours across the road, the Issa family. The Issas had stayed through the worst of the violence in this pretty, palm-shaded community, an hour's drive south of Baghdad.

Appearances are deceptive. Behind the high walls of their gardens, people are scared. “I don't feel safe here,” admitted Ghali Abdulredha Issa, the patriarch of the Shia family, who has seen no foreigners in his village apart from US soldiers since the 1970s. “There are many wanted Mahdi Army leaders hiding out here, men known to be slaughterers. Anyone could kill a Sunni person and the whole fight will start up again.”

Across the street, the Assaf family were even more frightened. Every morning, Menaf, 22, a student of agriculture, searches the flowerbeds for hidden explosive devices. Before leaving the house, one of them goes to the rooftop and scans the street for possible attackers. Menaf, who once sprinted for his life across the village from Shia gunmen, stays out for only very short periods.

A few Sunni families have found blue crosses chalked on their walls, an ominous sign that they could once again be attacked.

“Nothing has been resolved,” Menaf said. “Whenever the Government will be weak, they will kill ten times more than before and they will burn us. I heard many people saying when we brought our stuff back, 'Hey, Sunnis, why you are back? Wahabbis, this isn't your place',” he said, using the term for Sunni fundamentalists.

The Assaf family was forced by economic pressures to come back from the town where they had been sheltering. Mohammed is registered as a teacher in the village and cannot be transferred to Baghdad — as he would like — unless he pays a $500 (£250) bribe to Education Ministry officials.

About 4.5 million Iraqis have been driven from their homes in five years of conflict, with about two million living as refugees in neighbouring Syria and Jordan. Many observers worry that as they start returning to homes that have been taken over by other displaced families, fresh violence could erupt.

“Security is better than before but we don't want to stay in the area,” Mohammed admitted. “We only came back temporarily because my school is here and I can't commute indefinitely, it's too expensive.”

He is now trying to sell his house to raise money to start life afresh somewhere else, although they accuse the shadowy militiamen of trying to block any deals and make sure that they get a pittance for their property.

The scars of the conflict are fresh and divisions threaten to burst open at any time in a country with a long memory and a culture of revenge — an instability that informs the debate about how long to keep foreign soldiers in Iraq.

Tensions still run high, even between old neighbours such as Mohammed Assaf and Mr Issa, who wander freely into each other's houses. As Mr Assaf recalled how nobody had helped Jabala's Sunnis when they were being slaughtered, Mr Issa suddenly stood up and stalked out, muttering under his breath and apparently furious that his neighbourliness had been called into question. Once he was gone, the Sunnis spoke more easily.

“When we Sunnis talk among ourselves, we can get it all off our chests,” said Menaf. “The Shia normally apologise to us because other Shia did this to us, but we can't speak in front of them because we don't know, we are afraid.”

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