Shops with fresh vegetables, fruit and sundries are open and crowded with shoppers in the city of Balad, a Shiite enclave of 100,000 people, and its residents no longer fear leaving its confines to travel through the mainly Sunni Balad qadah (a supercounty) that surrounds it to reach Baghdad or the provincial capital of Tikrit.

Sunni farmers in the qadah now enter the city to deliver their produce and pick up necessities, instead of having to travel north to Samarra or Tikrit or south to Baghdad out of fear of kidnapping or assassination.

Roads into the city are secured by Iraqi police, national police and Iraqi army troops. U.S.-sponsored Sons of Iraq security guards keep insurgents and extremists at bay with their community checkpoints in the qadah; police patrol streets in the city; and soldiers of the U.S. Army's 101st Airborne prowl the countryside to roll up terror cells.

"We live in this area," said Sheik Bahjat Majeed Muhammad Salih. "But anything that happens in another city or province affects others, and that's what happened in 2006. The event that happened in Samara came to Balad."

The event referred to was the February 2006 bombing by al-Qaida terrorists of the al-Askari mosque in Samara (a predominantly Sunni city) and the tidal wave of sectarian bloodshed it unleashed around the country. The mosque, also called the Mosque of the Golden Dome, is a holy site to Shiite Muslims. It contains the tombs of two 9th century imams said to be direct descendants of the Prophet Mohammed.

Al-Qaida members are nominally Sunni, and their destruction of the mosque dome unleashed years of Shiite resentment over political and economic marginalization during the rule of Saddam Hussein.

Sectarian death squads, as well as al-Qaida, roamed cities around Iraq and slaughtered tens of thousands. In Balad violence was on a lesser scale, but was enough. The toll of hatred included about 80 Sunni residents who reportedly were dragged from their homes and killed by Shiite gunmen and more than a dozen Shiite construction workers who were kidnapped and murdered outside the city.

"It was horrible," said 1st Lt. Scott Marler with the 1st Squadron, 32nd Cavalry, 101st Airborne Division, which operates out of a base called Poliwada, a few miles from Balad. "There were bodies everywhere -- on roads, in the canals and in the fields."

Americans and Iraqis say several factors led to a turnaround. Jaish Islamiyah, a nationalist insurgent group that opposes Iraqis killing Iraqis, turned their guns on al-Qaida, which had exploited the sectarian divide and turned the Balad qadah into a base area. National police opened and kept open the main north-south highway that passes through Balad and the Balad qadah. U.S. troops, while continuing counterinsurgency operations, set up the Concerned Local Citizens program of armed neighborhood watch groups in the qadah to stymie gunmen's movements so they could be captured and detained more easily.

And at U.S. urging, tribes in the area -- Sunni and Shiite -- began a series of meetings on resolving differences and rebuilding an economy that was in tatters.

Sheik Bahjat chairs the tribal reconciliation group, which meets several times a week. "We still have some problems," he said. "But the problems are not like before. That is done."

As part of their hearts-and-minds counterinsurgency strategy, U.S. forces have organized rebuilding projects funded by either U.S. commander funds or Iraqi government funds ($1.77 million) made available to them. Since May, projects in Balad city have included restarting the canning factory, a major source of jobs in the city; repairing water sanitation facilities; giving microgrants to re-establish businesses in the Muhatta market area just outside the city; and repairing and reopening schools.

A U.S. business loan program, now taken over by the Iraqis, also is fueling a return to normalcy.

"Things are good now," said Khlaf Gazi, who manages a family-owned fruit and vegetable shop in the Muhatta shopping area, a strip mall of sorts along the main highway outside the city. "We closed for 19 months because sectarianism was really bad."

Gazi reopened with the help of Iraqi government funding.

Next door is the al-Salaam restaurant. It also closed for months but reopened four months ago with the help of a U.S. microgrant administered by the 32nd Cavalry. Many of al-Salaam's customers are the drivers of trucks traveling the secured Tikrit-Baghdad highway that runs past it.

The 32nd Cavalry, out of Fort Campbell, Ky., are proud of the stability they helped bring about since deploying to the Balad area in late September 2007. Attacks by improvised explosive devices and mortars in the Balad area of operation are down from 20 detonations last November to three last month. Nonetheless, at least twice a week the whop-whop of helicopter blades can be heard at Poliwada as soldiers conduct airborne assaults on suspected terrorist hideouts in the Jabouri Peninsula near Balad and other areas. Assaults are launched on other targets in the area by troops based at JBB Balad, a giant U.S. military facility about 20 miles away.

And daily patrols, alone or with their Iraqi police and army partners, continue without letup into the city and the qadah, especially the Jabouri Peninsula on the other side of the Tigris River.

"There are some cells here, and indications are the reduced (al-Qaida) leadership are trying to recruit and build their ranks again," said an American officer.

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