The US Central Command announced the arrest in Baghdad of Abu Abbas, who masterminded the 1985 hijacking of the Achille Lauro cruise ship in which a wheelchair-bound US tourist was murdered and thrown overboard.

Abbas had been considered a relatively minor terrorist figure, long out of action. But his arrest helped US officials bolster their case for having ousted Saddam's regime as a sponsor of global terrorism.

"The capture of Abu Abbas in Iraq removes a portion of the terror network supported by Iraq and represents yet another victory in the global war on terrorism," Centcom said in a statement.

US officials also said they were hot on the trail in Syria of a suspected senior Iraqi intelligence officer who was believed to have played a key role in a 1993 plot to assassinate former US president George Bush.

Faruq Hijazi, whose last official post was ambassador to Tunisia, had been spotted after flying into Syria from Tunis on Tuesday in an apparent attempt to seek refuge following the collapse of Saddam's regime, they said.

Although the Americans have declared the war in Iraq all but over, they are still warning of operations to come as they seek to root out suspected terrorists and find Saddam's suspected chemical and biological weapons.

But their public focus has been on the complex task of rebuilding Iraq and heading off mounting criticism of their failure to restore order, water, electricity and other basic services since Saddam fell a week ago.

Late Tuesday, US Marines here announced their first organizational steps, officially christening a civil-military operations center (CMOC) at the Palestine Hotel in central Baghdad.

The US Central Command said the CMOC would direct operations in four major areas: electricity, law enforcement, water and sanitation, and medical care.

"US Marines are working diligently to minimize the unrest within the city of Baghdad by helping to restore water and electricity and providing humanitarian aid, medical treatment and other basic needs," a statement said.

But a "message to the citizens of Baghdad" distributed in English and handwritten Arabic imposed a de facto night curfew, advising, but not ordering, Iraqis to stay off the streets between evening and morning prayers.

"To avoid placing Coalition Forces in a position where we must make a distinction between you and terrorist or criminal elements during a time of limited visibility, please do not leave your homes during this time."

The US army also made its first public appearance in a civil role, meeting Wednesday with members of the anti-Saddam Iraqi National Congress and a group of Baghdad police commanders at the Palestine Hotel.

"We hope to have a sizeable Iraqi police force within the next two weeks to take action and enforce law and order," said Lieutenant Colonel Alan King from the army's 422 Civil Affairs Battalion.

After a week of uncertainty, an increasing number of Iraqis returned to work Wednesday.

Normal life was picking up in Baghdad, with traffic jams clogging some streets, businesspeople cautiously reopening their stores and hawkers again selling fresh produce on the sidewalks.

But smoke still rose from a number of public buildings, with the bomb damage providing a stark reminder that little more than a week ago this city was still engulfed by war.

"The priority among priorities is electricity," said Osama Zubeidi, an electrical engineer who came to the Palestine Hotel in hopes of resuming his work.

No fewer than 2,000 workers were already on the ground doing repairs and much of Baghdad's electricity should be back on in a week, said Zubeidi's colleague, Ibrahim Saidi, citing information from power company authorities.

Water is already back on in parts of Baghdad, including the central area of Al-Mansur and, farther south, the Saydia quarter, with taps running for a few hours a day, according to residents.

US marines began joint patrols with Iraqi policemen on Monday, but by Wednesday had no more than a dozen teams out.

Centcom made it clear they were screening would-be Iraqi law-enforcement officers carefully for ties to Saddam's administration.

"In response to questions of concerned citizens, residents have been advised that officers are being trained and evaluated to ensure that they are capable choices for policing and that they have no ties as regime loyalists."

In the Shiite holy city of Najaf, 160 kilometres (100 miles) south of Baghdad, policemen organized by the newly appointed civil administration there with the help of the Americans began patrolling the streets.

And in southern Iraq, more than 100 employees of the Southern Oil Co. got permission to go back to work in the key Rumaila oilfield, perhaps as early as Thursday.

In the northern oil-producing city of Kirkuk, meanwhile, employees of the North Oil Co. were being urged to return to work from Saturday, with a view to getting oil production underway with a few weeks.

Schoolteachers and civil administration employees were also being called back to work.

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