CAMP FALLUJA, IRAQ — CAMP FALLUJA, Iraq - U.S. and Iraqi officials say that a decision in April to pull back U.S. forces from Fallujah inadvertently created a haven for terrorists and insurgents. But officials are reluctant to send U.S. troops back into the city for fear of touching off another uprising.
The officials say they are unsure how to proceed, but agree they merely postponed the problem when the Americans halted an attack in April, brokering a deal to keep Americans out of Fallujah and allow local Iraqis to police the city instead.
Iraqi and U.S. officials say they would prefer to re-enter the city with a sizable force of Iraqi soldiers, perhaps backed up by Americans. But they concede that an Iraqi force capable of mounting an effective assault on Fallujah, a city of 250,000 people, is months or even years away.
So the Americans and the new Iraqi government see a growing danger that - as long as they adhere to the agreement to stay out of the city - they are nearly powerless to confront.
"There is no question that Fallujah is a safe haven," said Lt. Gen. Ricardo S. Sanchez, until last week the head of all military forces in Iraq. "At some point it is going to have to be dealt with."
U.S. and Iraqi intelligence reports suggest that Abu Musab al-Zarqawi, the Jordanian believed to be responsible for scores of attacks here, is using Fallujah as a base for operations. He is thought to be working with dozens of hard-core Islamist fighters, many of them from outside the country, and former members of Saddam Hussein's Baath Party.
Iraqi officials say the terrorists are using the city to assemble car bombs and other weapons before sending them to Baghdad and other cities.
The Iraqi officials say the security force formed to police the city, called the Fallujah Brigade, has had little effect in breaking up the terrorist networks inside the city. The brigade is made up largely of former Baathists and some insurgents.
Senior Iraqi officials say the government in Fallujah has been effectively replaced by a group of insurgent leaders, many of them Islamist extremists, who dominate most decisions affecting the city.
The Americans say they could regain control of Fallujah by military means but likely at a cost of hundreds of Iraqi lives. They fear that significant bloodshed could spark the same sort of backlash as in April, when reports of as many as 600 people being killed inside the city became a rallying cry around Iraq and the Middle East and seriously strained relations with the Iraqi government.
For now, the Americans are effectively at an impasse. U.S. officers say that, under the agreement, they cannot even return fire when insurgents fire mortars and rockets at their troops from inside the city.
Instead, the Americans have limited themselves almost exclusively to airstrikes, which are having uncertain effects. In recent weeks, U.S. forces have mounted at least four airstrikes on buildings inside Fallujah that they say killed dozens of terrorists associated with al-Zarqawi's network. The claims are impossible to verify.
Iraqi officials say they vehemently opposed the agreement that turned over Fallujah to the insurgents, yet concede that they lack the resources to take control of the city on their own. Late last month, al-Zarqawi issued a statement in which he said he would try to kill Iyad Allawi, the prime minister.