The engineering corps of the U.S. occupation in Iraq claims to have spent $14.5 million to improve education, the electrical supply and sewage facilities in the southern city of Diwaniya. A statement by the group organizing American civil projects in the country said that the sum had been spent on 500 projects that were all carried out by Iraqi contractors. "These projects have contributed to improving educational, electrical and sewage systems," said a statement written in Arabic.

Diwaniya is the capital of al-Qadisiya Province, with an estimated population of nearly 500,000 people. A later statement said that the American troops have allocated an additional sum of $500,000 to furnish 10 of the city's schools with modern supplies.

However, residents from Diwaniya disputed U.S. and Iraqi government reports of tangible improvements in the standard of municipal services. They said official figures of expenditures and rehabilitation of infrastructure were highly exaggerated.

"There isn't a grain of truth in all this talk of reconstruction, and it is in contradiction to the situation on the ground," said Ammar Jaber, adding that the rosy picture being painted of public works projects being carried out in the city is easy to disprove. "Statements are one thing, but reality is something else. Conditions are worsening, not improving," he said.

Another resident, Hayder Abedali said that he believed that the U.S. and Iraqi governments were allocating the money, "But that's as far as it goes." He said he thinks that most of the allocations are filched due to rampant corruption.

Residents from towns other than al-Qadisiya's provincial capital had an even darker perspective of the situation.

"These statements are false and contrary to the facts on the ground," said Qassem Mansour from the town of al-Hamza. "There is only large-scale deterioration of the already collapsing infrastructure. All those in charge of the situation in the country are to blame," said Mansour.

Shamkhi al-Hussein said official statements on reconstruction were making him "sick."

"There is no transparency and no accountability. For this reason the province is descending into chaos as far as the provision of utilities is concerned," he said.

In the center of Diwaniya, the city's commercial hub, traders urged the country's civil institutions to "denounce" officials giving statements that fail to reflect reality.

Mounds of garbage dot the city center, and untreated water inundates the streets.