WASHINGTON: Once again, US armed forces appear on the verge of winning a decisive military victory in Iraq - this time in the holy city of Najaf. And once again, they appear closer to losing the larger wars for a stable and friendly Iraq and for an Islamic world that will cease producing anti-US militants.

That is the rapidly growing concern of Middle East and specialists as US Marines, after a week of fighting, captured virtually all of central Najaf on Thursday, including the home of Mehdi Army leader Moqtada al Sadr, and launched a final siege of the Imam Ali mosque, which is considered the world's holiest shrine by some 120 million Shias.

Even as the military commanders and Iraq's interim president, Iyad Allawi, debate whether to wait out Sadr and his armed followers, who are believed to be inside the shrine, or to invade its precincts - preferably with Iraqi troops - the end result is not likely to work in Washington's favour, according to most experts here.

Shias "world-wide are shocked and outraged over what is going on in Najaf", Imam Moustafa al Qazwini, a prominent Shia leader based in California, told the Los Angeles Times on Thursday. "They consider it an assault on the sanctity of Islam and in particular Shia Islam."

"Any attack on that city will destroy America's future in Iraq completely," said Al Qazwini, who supported the US invasion of Iraq but became disillusioned with the occupation after several months of travelling to the occupied nation earlier this year.

To Juan Cole, an Iraq expert at the University of Michigan, the fighting of the past week marks a major setback for Washington's larger political goals. "The credibility of the Allawi government as an independent Iraqi government has been decisively undermined by this," Mr Cole said, adding that while much of the Iraqi public was willing to give the interim leader a chance, "he will now be seen as nothing more than an American puppet or, worse, an American agent".

That impression is strengthened by the re-emergence of US troops and aircraft in the fighting over the past week, after a conscious effort since Mr Allawi took over in late June to sharply reduce the visibility of US forces in Iraq.

Mr Cole and others noted that Marines' actions have created serious and potentially fatal strains even within the government. Its Shia vice president, Ibrahim Jaafari, who is also leader of the Dawa Party and generally regarded as Iraq's most popular political figure, on Wednesday denounced the presence of US forces in Najaf, while the deputy governor of Najaf province resigned to protest "all the US terrorist operations that they are doing against this holy city".

In addition, the hard-line Sunni Board of Muslim Clergy issued a fatwa that no Muslims should cooperate with US forces in killing other Muslims, in a move that recalled events in April when Shias rallied to support Sunni fighters besieged by US Marines in Fallujah.

"What's going on right now looks a lot like April 1991, when it was (Iraqi President) Saddam (Hussein) who was crushing a Shia uprising. But now it's the Marines who are playing the role of the Republican Guard," Mr Cole told IPS, adding that US policy in Iraq was looking increasingly like "Ba'ath-lite", particularly under Mr Allawi.

Although a Shia himself, Allawi was a rising star in the Ba'ath Party when he broke with Saddam Hussein in the 1970s. Long favoured by the Central Intelligence Agency (CIA) during his exile in London, he has moved to rehabilitate thousands of former party members who were purged during the initial stages of the US-led occupation.

US support for Allawi has clearly stoked fears, particularly among the Shia and Kurdish communities, of a Baathist revival, and the past week's offensive against the Mehdi Army has done nothing to lessen them.

Reuel Marc Gerecht, an Iraq expert at the American Enterprise Institute (AEI), has warned repeatedly over the last several months that the administration should do everything it can to avoid attacking Sadr's militia in Najaf, as opposed to its presence in other strongholds in Baghdad and southern Iraq. Shias make up roughly 60 per cent of Iraq's population.

"If we go into Najaf in force, we will lose Grand Ayatollah (Ali) Sistani," by far the most influential Shia leader in Iraq, Gerecht, a former CIA operative, warned in May, adding that Ayatollah Sistani was much better able to neutralize Moqtada Sadr on his own. Sistani, who has publicly criticized both Washington and Sadr, left the country for medical treatment in Britain just as the US offensive got underway; his office called for a cease-fire on Thursday.

In the last two days, for example, the Mehdi Army has engaged against local police and coalition forces in five southern cities, while large-scale demonstrations were mounted in Sadr City, the sprawling Baghdad slum named for Sadr's father, which remains largely in the militia's control.

But the fighting in Najaf has much broader implications, which spell big trouble for the United States beyond Iraq, according to the experts.

"It is vital that Washington understand that it cannot consider the Shias of Iraq to be an independent, national body," warned Youssef Ibrahim, a former New York Times correspondent, in a widely noted column published in June. "Any efforts by the Americans or the new Iraqi government to marginalize or imprison (Sadr) would cause reverberations from Iran to Lebanon to Pakistan." -Dawn/The Inter Press News Service.