U.S. and Sadr's Army Look Set to Clash

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The killers had waited in the street, two of them scanning the crowd of afternoon shoppers for the young Iraqi they knew to be an informant for U.S. forces. When he appeared, they made their move. Seeing a pistol raised, the informant had turned to run, but too late. Three shots left him dead, blood flowing from wounds in his chest as the gunmen disappeared into the web of narrow streets that form the Shi'ite warren known as Washash.

Sadr City Gets Ready to Rumble

AUDIO: A new clash between the U.S. military and Moqtada Sadr's Mehdi Army now looks inevitable, says TIME Baghdad reporter Mark Kukis

Capt. Johnny Sutton took it hard when he heard the news. Tall with an angular face and calm eyes, Sutton seemed at turns shaken and angry as initial reports of the shooting reached him at an Iraqi army base nearby. Sutton was one of the few Army officers who personally knew the informant, believed to be about 19 years old, with family in the neighborhood. For roughly four weeks, Sutton and other Army officers had worked with him to gather intelligence on the local activities of militia loyal to Shi'ite cleric Muqtada al-Sadr.

"He was the key piece," says Sutton of his slain source. "He was a good kid."

Although there was little evidence of the identity of the shooters at the scene of the shooting, Americans who know the area had little doubt over who was responsible. Sadr's militia, the Mahdi Army, is increasingly active in Washash, which some U.S. troops now call Little Sadr City. Sutton believes they are working to make Washash a Mahdi Army stronghold west of the Tigris. Until now, the militia's base in the capital has been Sadr City on the east bank of the river, a sprawling slum that houses some 2.5 million Shi'ites. The Mahdi Army's expansion across the river complicates the efforts of U.S. forces to quell sectarian violence.

The first thing that hits you when you enter Little Sadr City is the smell. The odor of open gutters, animal pens and trash fires fill a thin haze that floats through the neighborhood, where posters of Sadr hang on many buildings. When U.S. patrols rumble into the area in armored vehicles, pigeons soar as lookouts signal their comrades as to the Americans' whereabouts. Gunfire often follows. Typically militia fighters will fire a volley of shots at a checkpoint manned by Iraqi security forces near a U.S. patrol. They may linger to fire a few more shots at U.S. troops arriving in the big green Stryker vehicles, but then they usually vanish. Like the killers who brought down the U.S. informant, the gunmen are seldom identified. But U.S. troops patrolling Washash assume they are Mahdi Army fighters operating with approval from higher-ups in the organization.

The Mahdi Army and U.S. forces have clashed openly several times in the past three years, fighting sometimes for days in battles that end inconclusively with uneasy truces. Today, senior officials on both sides insist they hope to avoid another round of bloodletting. And yet the mounting violence in the capital looks set to draw them into a new confrontation.

Last week, U.S. forces twice entered Sadr City, where they rarely venture, as the search for a kidnapped U.S. soldier continued. These raids were criticized by the Iraqi government, in which Sadr remains a key player. But as of Sunday, U.S. forces were maintaining roadblocks around much of the area, where U.S. officials at one point thought the soldier may be held in a mosque.

The heavy U.S. presence in Sadr City sparked street protests, with demonstrators calling for an end to the "siege" of Sadr City. And the fact that the U.S. security cordon around the area did not prevent a terror attack on Monday morning that killed at least 26 Shi'ite day laborers and wounding at least 60 people will only escalate the tension. One reason Prime Minister Nuri al-Maliki has castigated the U.S. for recent raids against the Mahdi Army is the fact that in Shi'ite communities, sectarian militias are often seen as a necessary level of self-defense against insurgent terror. Monday's bombing will be seen by many in Sadr City as a reminder of why they need the Mahdi Army.

Senior Mahdi Army commander Abu Baqir al-Kabi last week sounded a warning to U.S. forces against further escalation. "Now, we are dealing with them politically and peacefully," al-Kabi told TIME. "But if they continue provoking us, they should only expect the inevitable."