Marines civil affairs staff drew up last week a three-phase plan to inject cash into the city west of Baghdad once the conflict ends. The proposal is currently under review.

Fallujah leaders, Iraqi political parties and the US-led Coalition Provisional Authority are in the middle of negotiations to call off Operation Vigilant Resolve, launched on April 5 with the intent of crushing the insurgency in the Sunni Muslim bastion.

The more than 10 days of intense urban conflict has left some sections of Fallujah in dire need of reconstruction, with damage to basic utilities and infrastructure, said Lieutenant Colonel Alan Burghard.

The fighting has set back progress, leaving the coalition further behind in its task of reviving the squalid city, already lacking a regular supply of electricity, a clean water supply and a healthy sewerage system.

"Now you have to start (over) and fix things that were ok," Burghard said.

As well as collateral damage from running street battles with the US forces, insurgents have probably performed acts of sabotage, he added.

The proposal, entitled the 1st Marine Division Project Priorities for Post Conflict, calls for the injection of 500,000 dollars in the first 30 days after peace is restored, said Major Michael Clausen, charged with fiscal funding for the civil affairs department.

The document, shown to AFP, recommends the funds be spent on "unspecified battle damage" in Fallujah including trash removal, and repairs to roads and buildings.

The package includes 300,000 dollars earmarked for repairing mosques, seized by insurgents in the fighting to fire from and then shelled and bombed by the marines.

In the next 30-day phase, the plan envisages the allocation of 2.7 million dollars for education, health, construction, roadwork, sanitation projects, education, police station renovations and telephone lines among other areas.

The third and final phase, 60 days after the official end of the fighting in Fallujah, calls for allocating 74 million dollars through the coalition's Programme Management Office, charged with reconstruction projects.

"They're looking at spending some pretty heavy money at Fallujah," Clausen said.

The showering of cash on Fallujah would reverse the Marines' decision earlier this month to freeze spending in many areas west and south of Baghdad, considered bastions of the insurgency.

When Operation Vigilante Resolve kicked off two weeks ago, Major General James Mattis asked battalions to review all aid projects in Fallujah, Iskandariyah, Mahumdiyah, Ramadi, Saqlawiyah, Habbaniyah and Khalidiyah, Clausen said.

Reconstruction projects and planning by the Marines were frozen everywhere but Ramadi, where the decision was made to proceed with all but five of 69 projects.

In Fallujah, projects were not yet off the ground as concerns about security slowed Marine efforts to meet with community leaders.

The Navy Seabees, who work on construction and assessment for the Marines, suspended 62 projects worth 10.5 billion dollars.

"The concern was the Sea Bees' safety and also where the money was going because we pay these guys (Iraqi contractors and workers) in cash," Clausen said.

"There is a plan to push money in here once things are done."

WAR.WIRE