Basra seems like a model postwar city. Its streets bustle with life. Its markets are full. Nearby, one of the world's richest oil fields supplies the 1.7 million barrels a day that pass through here.
Less than 2 percent of attacks in Iraq take place in Basra. British troops patrol without helmets.
It might seem like life in Basra is better than ever, but just below the surface there is a darker reality. Shiite fundamentalist politicians now govern Basra and are using their private armies to run the city. They have banned alcohol, forced more women to veil and kidnapped and killed reporters.
The owners of one music store told us the militias threatened to close them down.
“There's no freedom here,” said the shopkeeper. “The militias are the police.”
At a checkpoint a block away, we asked police to respond to the accusation.
“The militias and the police work closely together to protect the people,” an officer said. “And the militias,” he said, “have better intelligence than we do.”
The people of Basra tell us the central government has very little authority here. They say that the militias are in charge and that the police are helping them. Even the police chief says he doesn't trust 60 percent of his force.
So, who are the militias?
One is the Badr Brigade, trained and funded by Iran — a group that has been accused of assassinations and of torturing Sunni rivals.
Another militia is loyal to hard-line cleric Moqtada al-Sadr. British diplomats told NBC News an offshoot of Sadr's group in September attacked British troops, who were then kidnapped by police.
“You don't know who is on your side,” says Capt. Steve Monteith, with Britain’s 1st Battalion, Highlanders, “and, unfortunately, for a lot of time here, I don't think you are going to know who is on your side.”
Amjed Saad, a reporter for the local TV station, says Iran is turning Basra into a mini-Islamic state under its influence.
“We have 40 Islamic parties just in Basra,” he says. “Many are backed by Iran.”
And those parties are now pushing for the region to be autonomous — oil-rich, hard-line and tied to Iran.