Life is returning to the devastated city of Falluja, west of Baghdad.

In interviews, the residents that have decided to return say that life is slowly returning to normal, and many residents have began rebuilding their damaged homes and cleaning the streets.

U.S. troops attacked Falluja last year to flush out the insurgents. Most of the city's nearly 300,000 inhabitants fled before the attack. The U.S., after destroying the city, decided to rebuild it. It has allocated $100 million for Falluja's reconstruction.

But not everyone is happy. Many are indignant, saying that neither the U.S. nor its allies in the interim government have honored their pledges to help them rebuild their lives. Hassan Abdullah has pitched a tent close to his destroyed home.

"I have a family of seven. We returned and found our home completely destroyed. We had to erect a tent here and still don't know whether we will ever have a house again," he said.

Many thought the U.S. would be more generous, but are now bitter over the slow pace of distributing compensation, and the sums earmarked for families who lost their homes.

There are many tents in the city right now. "We thought living in a tent was a temporary solution, but five months after our return to the city, we see no light at the end of the tunnel," said Mohammed Hafidh. "They want us to build what they destroyed with our own resources, which we do not have," he said.

Ahmad Mustafa complained that the authorities were not fair in handing out compensation. "Families with minor damage occasionally get more than those who had their homes destroyed," he said.

He also said that even the highest level of compensation -- about $2500 -- is "considerably insufficient" to repair a heavily damaged dwelling.

Thousands of homes in the city were damaged or leveled in the fighting. Some families say they have received nothing so far.

Naaima Abdullah from the Al-Andulus District, which saw some of the fiercest fighting, says that she and her family are still living in the debris of their "once beautiful home."

"No one has given us anything. We have removed part of the fallen pieces and still live in the heap of the debris of our former house. We have no other choice," she said.

Fighting has ended in Falluja and tens of thousands of people are believed to have returned. But the city suffers from lack of public services such water, power and other amenities.

"The authorities' reluctance and delays in agreeing to hand out reasonable compensation will make a return to normalcy very difficult," said Mustafa Hussein.

Most of the school buildings that the insurgents used as strongholds were destroyed. Teachers now have to give classes in tents that are attended by just a fraction of the city's student population.

Noor Sulaiman, the head of the Falluja Teachers' Training College, says the school's building is heavily damaged, "and no official --neither U.S. nor Iraqi -- has bothered to even visit the college to assess the damage."