Nabil Mahdi's small textile business in Najaf's bazaar boomed soon after the US invaded Iraq. The borders opened to Muslim pilgrims for the first time since the 1970s, and hundreds of thousands of Iranian Shiites poured into this famed holy city to pray at the Shrine of Ali, and do a little shopping.
For Mr. Mahdi, whose petroleum engineering degree became useless after he refused to join the Baath Party, it was the first taste of prosperity after decades of suffering under Saddam Hussein.
But today, he sits cross-legged among his bolts of cloth without a sale or even a customer in sight.
After 20 years under Saddam, Mr. Mahdi says he has something new to be bitter about: The Mahdi army. The militia loyal to the Shiite cleric Moqtada al-Sadr has engaged in sporadic gun fights with Spanish and US forces on the outskirts of the city for the past two weeks, and continues to patrol the streets here.
The fighting, and the militia, has scared most pilgrims away. Streets where pilgrims pressed up against pushcarts filled with toy and pomegranates just a month ago are now empty, and the atmosphere is tense.
"These militias have become the major obstacle to our prosperity,'' says Mr. Mahdi. "If Saddam taught us one thing, it's to love peace. And now these people, not the Americans, won't let us have it."
While the situation in Najaf is calm, it is not resolved. US troops on the city's outskirts, who were ordered to kill or capture Mr. Sadr over a week ago, have begun to pull further away from the city. Commanders worry that a battle in the holy city would unite Iraq's Shiite community behind Sadr. Sadr has sought to paint himself as a symbol of Iraqi nationalism and resistance to occupation.
"The problem of Sadr is bigger than Sadr. It is the whole Shiite community and the holy shrine," Lt. Gen.Ricardo Sanchez, commander of US forces in Iraq, told troops on Tuesday as they prepared to pull back from a base about 15 miles outside of Najaf. "We have just about eliminated all his influence across the south... but the real center of mess is right here. The problem is that if we launch you into the city of Najaf ... and if we get into destroying the holy shrines it will create a backlash."
The US has branded Sadr a murderer for alleged involvement in the slaying of a rival cleric here last year, and has said he will have to be arrested. But they're not moving to take him by force.
The US approach has the residents of Najaf breathing a collective sigh of relief, worried that their city was about to become Iraq's next Fallujah. But it's not clear yet that Najaf's people will soon deal with Sadr on their own. Local resentment is only simmering under the surface here in Najaf.
Unlike the other cities Sadr's men grabbed in their brief uprising earlier this month, Najaf remains in his hands. In the town of Kut, a few hundred militiamen melted away when US armor moved on the town. In Karbala, members of Shiite militias friendlier to the US presence pushed Sadr's men under ground.
Najaf is different. In the small town of Kufa on Najaf's edge, where Sadr delivers fiery sermons every Friday to thousands of adoring supporters, militia men continue to patrol. In Najaf, they frisk pilgrims as they seek to enter the shrines. Sadr's men also control activity inside - including overseeing collection of the donations that are traditionally left there. There are no armed police or other Shiite militias in sight.
Thursday, a group of 25 tribal leaders issued a statement in Najaf calling on all armed groups in the city to disband. "We call you upon to leave matters to Iraqi officials and legitimate authorities so that the blood of innocent people is not shed," the statement said.
It's unclear how much influence the statement will have. Iraq's tribes are crucial political factors inside Iraq, but they are not homogenous. Hanging from the Shrine of Ali, many banners claiming to be hung in the names of major shrines declare their support for Sadr.
"We are the ones bringing peace and security to Najaf,'' says Mohammed al-Jenabi, standing in a circle of armed Mahdi army members near the shrine. "The US has shown that they're brutal and that they intend to occupy Iraq indefinitely. We want peace, but there's a red line around Najaf and they'd better not cross it."
Officials close to the mainstream Shiite clergy here, led by Grand Ayatollah Ali al-Sistani, say the large Badr Brigade militia, close to a major Shiite political party, has been ordered to avoid a confrontation with Sadr's men at all costs. They say Ayatollah Sistani is worried about a Shiite-on-Shiite conflict.
"It's a little better than a week ago, I let my kids go back to school on Tuesday,'' says Mr. Mahdi, the shopkeeper. "But it could all change in a minute. There's no proper government here, no police. Until the militias are gone, you live in Najaf at your own risk."