“It’s not much, but I’m better off than my neighbours,” he said, pointing at the huge piles of rubble either side of his home, which workers were clearing with their bare hands in the baking sun yesterday. “I plan to move back in here tomorrow and then maybe my wife and children can follow. Being a refugee is worse.”

Like most of the residents of this luckless market town west of Baghdad, Mr Ahmad has the drawn, defeated look of someone who has endured one of the toughest experiences anywhere in postwar Iraq.

Fallujah, which was known for its many mosques, its strict tribal customs and its proud, some would say arrogant, citizens, has lurched from one bloody episode to another as it has earned the reputation as being the most dangerous city in Iraq.

Now a tour of Fallujah, once feared by foreigners as the headquarters of the most militant of the Islamic insurgents, is akin to visiting a violent psychiatric patient after a lobotomy. Children wave, shopkeepers smile, and it is even possible at dusk to walk through a residential neighbourhood with only the odd crack of distant gunfire punctuating an otherwise calm evening.

By the standards of Iraq today, Fallujah is peaceful. Where other cities are subjected to suicide car bombs, Fallujans stop meekly to allow US military convoys to overtake or wait for hours in long queues to be searched and checked before entering the municipal boundaries.

The reason for the city’s passivity is the thousands of US Marines who have built such a tight security cordon around it that it is jokingly referred to by the Americans as “Iraq’s largest gated community”. The Marines led the offensive last November to reclaim Fallujah, which had become the headquarters for the insurgency and a haven for militant Mujahidin volunteers, who flocked here from across the Arab world.

In the three-week battle, more than 1,000 insurgents and 38 Americans were killed, the city was left in ruins and the population homeless. The Americans vowed that it would never return to its former lawlessness.

“If we removed the controls, there is no doubt that those for whom we shed so much blood to remove would return to Fallujah once more,” Lieutenant-Colonel Richard Miles, one of the Marine commanders in the city, said.

Yet, with the controls in place, it is not clear that the city will ever recover properly. Only about half of Fallujah’s 250,000 population have returned home; large residential and commercial areas lie in ruins and basic services such as water and electricity are patchy at best. For those who do live in Fallujah, life is made even more difficult by the draconian security measures that make it difficult to conduct business and trade, the lifeblood of the city.

Each resident must obtain a security pass from the US military. The pass contains the holder’s names, other personal details, a photograph, fingerprints and an iris scan, which is fed into a computer and can be cross-checked with the names of suspected insurgents and former detainees. The cutting-edge biometic technology may give the Americans a security edge, but it has won them few friends.

“Everyone is out of work,” Shafi Mohammed Khalaf said. “I am a driver, but I am trapped in Fallujah. How can I drive when I can’t leave the city?” The restrictions have led to growing calls from local leaders for the need to ease the security cordon and allow normal life to return.

Sheikh Khaled al-Jumaili, a formidable turbaned and bearded tribal chieftain who was elected head of the city council this week, boasted that Fallujah’s days of violence were over for good.

“Fallujah is the safest city in Iraq, compared with the others,” he said. “The people here don’t want to fight any more, they want a return to normal life.”

Coming from him, the remarks carry some weight. When the insurgents ran the city, he had such good relations with them that he was detained by US forces; now the Americans welcome his high-level appointment.

Nevertheless, no one would predict confidently that this city’s problems are over. Insurgent activity has increased substantially across Anbar province, where Fallujah is one of the main trading towns on the Euphrates. There are fears that insurgent cells have returned to the city and are planning to strike.

“Fallujah is a place where we have seen the worst of the worst,” a US official said. “We know that if we can make it work in Fallujah, we have crossed a Rubicon.

“The insurgents know that, too, and they will do everything to stop that. It is a pivotal contest.”

His suspicions are confirmed by Ahmad Ismali, an Islamic student from Fallujah, who still lives as a refugee in Baghdad, and is one of many young men plotting how to drive the Americans out.

“I would say that 70 per cent of Fallujans supported the resistance,” he said. “It is the natural response for any occupied population. The resistance is still there. We are just waiting for the moment to strike.”

TARGET CITY

Times Recommends

• The Japanese Prime Minister is doomed: or is he?
• Brighton company 'involved in cyber attack'
• The art of survival: it's all in the mind