NEAR FALLUJAH, Iraq, Nov 5 (AFP) - The United States is drawing up plans to help rebuild the Iraqi rebel-held city of Fallujah with expectations mounting of a full military onslaught soon to flush out insurgents if efforts at a negotiated solution fail.
The project will be backed by a 40-million-dollar (30-million-euro) US military fund while Iraqi police will be brought in to patrol the city and a new city government will be formed under the supervision of the central authorities in Baghdad.
The threat of a full US military assault has been looming large over the city, which has been labelled a headquarters for Iraq's deadly insurgency and has been ringed by more than 1,000 US and Iraqi troops since mid-October.
Negotiations between the Iraqi government and Fallujah leaders are ongoing, but show no sign of a breakthrough and thousands of resident have already fled the Sunni Musim bastion in fear of a military showdown.
"Fallujah is a green zone for insurgents," said State Department representative for Fallujah, John Kael Weston, making ironic use of the term for the US government's fortress-like headquarters in Baghdad.
"If that model is broken and they (rebels) go to their ratlines... is it still as big a problem as when they had Fallujah as a safe haven? No."
The Americans say Iraq's government and US-led multinational forces must move fast to restore law and order in Fallujah, 50 kilometres (30 miles) west of Baghdad, if a US military offensive is launched.
"The Iraqi interim government will... send a delegation down... and I'll be working with them to establish a government in Fallujah," said Captain Brian Reynaldo, a marine representative for municipal affairs for the city.
Reconstruction projects must also kick in swiftly as the Iraqi government starts a campaign to keep Fallujah from falling back into rebel hands.
"The focus will be to get to a point... where they (residents) see tangible benefits," Weston said.
The US team would serve as advisors to the Iraqi delegation in shaping the new government, Weston said. "We're trying to help them focus on a game plan."
Plans have been drawn up to provide humanitarian aid almost instantly if fighting breaks out, said Major Naomi Hawkins, a spokeswoman for the marines' civil affairs division.
Five five-man civil affairs teams would be sent in, attached to marine fighting units, to provide food, water, blankets and medical care to civilians and make initial assesments on humanitarian and infrastructure needs, she said.
As the fighting draws to an end, marine commanders on the ground will start handing out up to 40 million dollars from the US military's Commander's Emergency Response Programme fund.
The money would go out to Iraqi contractors for projects like clearing the rubble and basic infrastructure repairs, Hawkins said, while contracts worth another 48 million dollars are expected to kick in 60 days after fighting ends.
The funds will also be used for compensation payments of up to 2,500 dollars for death, injury and property damage.
A key to the success of the Fallujah project would be a heavy Iraqi security presence in the city, the US officials said, saying they wanted Iraqi police on every street rather than just marines in the city.
The Americans said they could cut deals to make Fallujah a success, even if it meant forging alliances with those who flirted with the insurgency or have links to criminal activities.
"I don't think you can find anyone who is completely clean... that doesn't mean we can't do business with them," Weston said.

11/05/2004 13:53 GMT - AFP