Patchwork of progress and perils in Iraq

But Orascom's experience is emblematic of the problems facing those trying to take advantage of new opportunities.

Security problems have made it difficult for the company's workers, who have been kidnapped and shot at, to expand the network. Currently, it may require a dozen attempts before phones connect, and the network often doesn't work at all during large chunks of the day.

Insurgents have worked to undermine basic services like electricity and water supplies in an effort to turn Iraqis against the US and erode American will to stay in Iraq. It's a hallmark tactic of "fourth generation warfare," says Col. Thomas Hammes, a senior military fellow at the National Defense University.

Insurgents "seek to convince enemy political leaders that their strategic goals are either unachievable or too costly for the perceived benefit. The fundamental precept is that superior political will, when properly employed, can defeat greater economic and military power," he wrote in a paper published in January.

That means two years after war began, electricity is on about two out of every six hours in the capital because insurgents are attacking the workers trying to repair the power grid. Electricity output has been restored only to prewar levels, 4,400 megawatts a day.

But unlike Hussein's era, it is distributed equitably. Baghdad, once given extra electricity at the expense of southern regions which Hussein repressed, now has to share with the rest of the country.

Insurgents have also struck at Iraqis' aging oil infrastructure, which US administration officials expected to be the lifeblood of the country's reconstruction. Insurgents have handed out leaflets saying working on the oil infrastructure is helping the US, and anyone doing so will be killed. They have made good on those threats, attacking workers trying to repair damaged pipelines and refineries.

Attacks on oil tankers, pipelines, and refineries, particularly this fall, have periodically cut as much as 100,000 of barrels of production from the country's usual average of 2 million barrels a day.

As a result, Iraqis had to wait as much as two days this fall and winter for a fill-up.

Attacks jumped from about 12 each month before the US handover of sovereignty June 28 to about 24 a month in October 2004, spiking at 46 attacks in November and continuing into the winter with about one or two a day, according the interim Oil Minister Thamer Ghadban.

But most Iraqis say they can live with gas lines and power outages if they can be assured of safety.

"Yes, some new things are available now, mobile phones, satellite TV, new cars. But the thing that we lost is more valuable," says Basim Majid, the manager of an electronics store. "We are in the middle of chaos and there is no way back. I hope they use force to spread security."

Bassam Henna, who is unemployed, is discouraged. "Frankly, the time of Saddam was better in general," he says. "Not Saddam himself, with all his faults and all his mistakes, but in general, that time was better than now. If we are missing him, imagine what the situation is like."

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