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The loss of internal and external allies now forces U.S. commanders to rethink their tactics and timetables. The notion that U.S. soldiers would gradually pull back off the streets of the cities to a local base and then to a few main garrisons while local Iraqi forces stepped in to smooth the path toward a peaceful and democratic Iraq looks a little quaint now. And as long as U.S. troops are spread out across the country to douse local flare-ups, the supply lines will be long and the convoys vulnerable to roadside bombs and ambushes. The only way to protect such convoys is to make them big and mean enough to defend themselves against attack. That may mean adding air cover, usually helicopter gunships like the Army's AH-64 Apache or the Marines' AH-1 Cobra--which in turn would require more troops and more choppers than are available in the theater at the moment. Although vital supplies are getting through, there are shortages of little luxuries--like deodorant--in the green zone, and looming shortfalls of ammunition and fuel. "We didn't have enough transportation units in the major combat operation, and we sure don't have enough now," says an Army planner intimately involved in the war. "You know, we were thinking of taking airmen and sailors and throwing them into trucks. We abandoned that, but that shows how desperate the Army is for people."

With each notch up in tension, the whole rebuilding enterprise becomes more difficult. The fighting has grown so intense, security costs that were supposed to account for about 10% of the $18 billion in reconstruction money through September 2004 are instead running at 25%. Major contractors like General Electric and Siemens AG are scaling back their efforts because of the unsafe environment. Money and energy that were meant to go into new schools and new water-treatment plants are diverted toward rebuilding bombed police stations and retraining Iraqi troops.

With reversals of fortune come reversals of policy: having initially dissolved the Iraqi army and purged civilian ministries of most members of Saddam's Baath Party, Pentagon officials reversed course--they deny it is a policy change--and began inviting them back in hopes of drawing on much needed expertise. Despite President Bush's vow that the June 30 deadline for handing sovereignty back to Iraqis was cast in stone, Administration officials on the Hill were slicing the definition of sovereignty. The interim authority could make no laws, they said, and even Iraqi troops would remain under American control.

--THE FALLUJAH DILEMMA

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