There is big excitement on al-Marifah Street. City workers are installing a new transformer to bring power to a part of the southern Baghdad neighborhood of Saidiyah that hasn't been on the city's electrical grid for more than a year.

"A year ago, dead bodies lay on this street for days; no one dared to pick them up. But now we are getting lights and shops have opened back up," says Mahdi Jabbar Falah, a 40-year resident who has just moved himself and his family of nine back to their house. They fled last year after Mr. Jabbar received a bullet in an envelope, a sure sign he was on someone's hit list.

"Last year, this was a ghost town," he says, "but now I feel we are alive again."

Saidiyah is one of the many neighborhoods and towns in and around Baghdad that residents abandoned during the worst of the sectarian violence. Officials there estimate that more than half the area's 60,000 people moved out. Now, many are moving back and the trucks overflowing with household goods coming through al-Marifah Street attest to that.

But there has been a price to pay: Saidiyah is now surrounded by a 12-foot-tall concrete wall, a barrier that the US military completed four months ago. Long lines of cars await inspection by the Iraqi Army at the town's one public entrance, while pedestrians submit to a pat-down.

The US Army maintains two camps here and the Iraqi Army is a substantial presence. Local young people, part of the "Awakening" or "Sons of Iraq" movement the US military developed and financed to draw locals into the battle with Al Qaeda in Iraq extremists, also patrol the streets.

Many families have also returned to find themselves in the middle of property disputes. In some cases, after the families left Saidiyah, they rented out their house and now some tenants refuse to leave. In other houses, squatters have simply made themselves at home.

"There are problems. We have to sort out all these cases of whose house is really whose and who has taken advantage of the situation to move in," says Ali al-Amari, director of the Saidiyah Support Council, a committee formed to foster reconciliation and settle property disputes.

Displaying a hand-printed log of the more than 370 cases of squatting and other claims registered since February, Mr. Amari says, "The important thing is we have our security back. It's amazing," he adds, "You could say it's safer than Michigan."

Baghdad's new walled communities

Most residents seem to prefer the security wall and the body searches to the conditions of last year. "Some of our visitors say, 'How can you live here, it feels like a prison,' " says Amer Mohsen, a retired gym teacher. "I tell them I can't see the wall from my house, but I can see its benefits."

Still, Saidiyah bears the scars of many months of sectarian violence. A mostly upper-middle-class neighborhood of distinct Shiite and Sunni blocks, Saidiyah witnessed acts of terror that hit all communities, but targeted Shiites most.

Feras Ibrahim is a Sunni who moved to Saidiyah 18 months ago from another Baghdad neighborhood where conditions were worse for him. Two months ago he bought a wholesale grocery business on al-Marifah Street that was abandoned by a Shiite owner who was threatened with death if he didn't leave. "They left a bomb outside the door one night, they strafed the façade with gunfire. The bullet holes are still there as a reminder," says Mr. Ibrahim.

Some critics of the American military's construction of walled communities say it has reinforced Iraq's sectarian divides and turned Baghdad's many mixed neighborhoods increasingly into distinct enclaves.

But officials at the Saidiyah Support Council say both Shiite and Sunni are returning to the neighborhood. And they insist they are careful in their deliberations on property disputes to favor the law and no particular sect.

"We are a council of 24 – 12 Sunnis and 12 Shiites – we know very well how important it is we show we are working together," says Amari.

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