THE constant blip, blip of a checkout scanner heralds big change at the al-Ameray supermarket on Basra's main market street, as young Iraqis snap up nappies, magazines, ready meals and the latest perfumes.

Five months ago this street was shuttered and empty, the silence broken only by the whoosh of rocket-propelled grenades and the clatter of an AK47 assault rifle. But today business is booming.

Next door a queue forms outside a butcher's and nearby women, their hair uncovered, haggle over fresh pomegranates, apples and oranges on a pristine market stall. Once, these women faced being beaten to death for daring to go out unveiled-vicious punishment meted out by gangs of hard-line JAM militia who roamed the streets trying to impose extremist Sharia law.

Now the mobs are gone women are returning to work and university for the first time in five years. Five tough years that cost the lives of 176 brave British soldiers.

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Last week News of the World journalists became the first British pressmen to wander free through the streets where our troops have faced a fusillade of rocket and bomb attacks.

A military escort is still mandatory to leave the British Army base on Basra's outskirts. But inside the city our soldiers now look less like an occupying army and are greeted with smiles and waves instead of bullets and explosions.

When the current force arrived in May they were told they would have to fight their way in and out of the city on every patrol.

Sgt Ian Walker from the 1st Battalion, Royal Regiment of Fusiliers, is on his third tour of Iraq. Scanning the crowded street, he said: "Last time I was here we were under constant attack. Things were very hostile. Now the situation is very quiet and the Iraqis seem happy to see us."

The reason for the dramatic change lies with the armoured Humvees of the Iraqi Army's 14th Division parked on every street corner. There are now 30,000 well-trained and disciplined Iraqi soldiers in Basra.

The healthy city bustle encourages diplomats here to boast of "a new dawn". But in reality this chaotic place is closer to downtown Cairo or Nairobi than a Western city. The air is still thick with the stench of exhaust fumes and rotting sewage.

On a main highway a shepherd urges his flock along. A one-armed woman begs beside the smashed-up car that is her family's home. Bombed-out buildings are scavenged for construction materials and the surrounding desert is still littered with wrecked tanks. Most children are barefoot and hundreds still die from cholera and typhoid every year because of the filthy conditions. Nevertheless they look well-fed and all can go to school.

And the city is far from the hellhole it became following the fall of tyrant ruler Saddam Hussein.

Looters

Then, shops were systematically cleared out by looters, forcing most to close.

Now mobile phone store owner Sajad Alabadi, just 21, rejoices that his business has not suffered a single robbery in two years. With no reliable landline network, young Iraqis snap up the latest Nokias as Sajad tells us: "Young people here just want the same stuff as in other countries.

"As well as male customers we now have lots of women coming in wanting mobiles, and they've got the cash to pay for them because they now have jobs."

Five doors along is that modern al-Ameray supermarket-Basra's first. Boss Uday al-Ameray is proud of his glass-fronted store packed with the same brands you see at home-Pampers nappies, Pantene shampoo, Coca-Cola. He says business is booming and plans to open a chain. "When we opened in 2004 we had to have armed guards on the door," he said. "We were closed for weeks because it was too dangerous to come to work.

"But now employers are paying more, so people have more to spend with us. Next year we will be bigger than Dubai!"

It sounds fanciful, until you remember Basra province floats on oil, its wells and refineries producing 70 per cent of Iraq's income. At Umm Qasar it boasts a deep- water port where goods shipped from the Far East could be moved on to Europe by land in 48 hours-far faster than the pirate- plagued voyage up the Suez Canal.

But there are still many downsides. This city of three million has 170,000 unemployed, mostly young men. Less than a quarter of those can read and write.

Just one in four of the population has clean water and working sewers. And the oil plants colour the night sky orange-antiquated refineries wasting £40 million a DAY because they can't convert the gas they burn off into energy.

Safe

In September oil giant Shell signed a £3 billion contract to upgrade Basra's refineries. But work cannot start until the Iraqi government agrees to allow foreign companies to invest.

And no oil firm can start work until insurance companies decide it's safe enough. The first step towards that came in March-the so-called "Charge of the Knights", a massive strike by Iraqi soldiers to drive out Shia militia. A ceasefire was negotiated and 6,000 mortars, 690 rockets and more than 300 improvised explosive devices were seized.

Until then there were dozens of attacks every day. Since August there have been just four rocket strikes on Britain's base and eight bomb blasts in central Basra.

A survey of Basrawis last month showed the security situation was now only sixth on their list of priorities, way behind worries like jobs, hospitals, schools, water, and electricity.

Down on the famous Corniche waterfront wedding parties fill the floating restaurants again, feasting on kebabs and prawns, washed down with imported Coke and Fanta. They can even buy Lebanese wine if they know the right person on the black market. The change was seen firsthand by International Development Secretary Douglas Alexander, the first British politician to walk Basra without body armour.

Future

"It was a hugely optimistic experience," said Alexander.

"I came to Basra last year for meetings with Prime Minister Maliki but because of security we were obliged to have them in the base. So the walk down the Corniche was a very gratifying illustration of the scale of change. People communicated a real sense of possibility for the future."

After years confined to base, experts from his department's Provincial Reconstruction Taskforce now dash into the city several times a day. There is a sense of urgency-a need to get projects up and running before the British presence here is dramatically reduced after Christmas. Tackling unemployment is a major task.

On the Corniche sits Jassim Nassir, 21, who has never had a job. With no job he has no cash, and that means no hope of a wife or children-easy recruitment prey for the armed militia.

Jassim said: "It's safe now, schools are open and we have more power. But until we have jobs there is no proper hope."

Last week hope came a bit closer with a clutch of billionaire potential investors from Dubai visiting the city and port.

Around us this is a city getting on with business, hoping the ceasefire will now turn into permanent peace. A peace only made possible by the deaths of 176 British heroes plus the skill and commitment of all their comrades.

They kicked out Saddam, subdued the militias and trained the Iraqi army that now provides security. This time next year they will be a distant memory here. But they leave a legacy all Britain can be proud of.

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