Iraqis Trade in 'Saddam' Bills for New Currency

Behind a shield of American armor, Iraqis began trading in their old money Wednesday, exchanging dinar notes bearing pictures of Saddam Hussein (search) for new bills the U.S. occupation authorities hope will become the currency of a revived economy.

The anti-American insurgency continued, as U.S. forces reported killing "a small number of opposing forces" near the desert border with Syria (search), and killing two Iraqis in a clash north of Baghdad, in an area with lingering support for the fugitive ex-president Saddam.

"He's gone and now his picture is gone, too," said Bank of Baghdad worker Raghad Kandala, 28, as businessmen and other customers lined up to hand in their expiring "Saddam" banknotes.

Although it was the first day for the new bills, the flow of bank customers seemed nearly normal. Iraqis have until Jan. 15 to make the exchange, and many had already deposited old notes in bank accounts in recent weeks. "So there's no need for a stampede," said Mowafaq H. Mahmood, chief executive officer of the private Bank of Baghdad (search).

Some Baghdadis also stayed away out of fear that pro-Saddam militants might target banks on this day, in a city rocked by three suicide car bombings in just the past week.

"That's why we've got American protection," said Mahmood, whose headquarters bank on Karrada, a downtown avenue, was guarded by a Bradley armored vehicle, U.S. soldiers and Iraqi police, and razor-wire barricades. Similar security was thrown around other banks.

The recent bombings, which left about 20 dead, have further strained nerves in an already-tense city. American helicopters buzzed central Baghdad throughout the day Wednesday, as U.S. and Iraqi security forces tightened controls around the Palestine Hotel, home to international journalists and U.S. contractors, because of a reported threat.

One of the latest suicide bombings struck Sunday near the Baghdad Hotel, four blocks from the Palestine.

"We heard a lot of rumors that something bad might happen today," said housewife Ghada al-Nydawi, who kept her four children off the streets Wednesday. "We didn't even go to the bank today to change our money."

Elsewhere in Baghdad, the visiting U.S. commerce secretary, Don Evans, told reporters he believed the news media were painting too dark a picture of developments in Iraq. More of his countrymen should visit, he said.

"Americans need to come here and see the opportunity. There is great economic opportunity," he said.

On Oct. 2, however, the State Department in Washington issued a statement warning travelers that the security threat to Americans in Iraq was high.

The border clash occurred at Qaim, about six miles from Syria, when a U.S. Army helicopter was hit with ground fire about midnight Tuesday and made an emergency landing, the U.S. military reported. "A small number of opposing forces were killed or captured" when U.S. ground forces returned fire, a spokesman said. No U.S. casualties were reported.

American officials have complained of foreign fighters slipping into Iraq along the Syrian frontier.

The other fatal clash occurred in Baquba, 35 miles north of Baghdad, in an area long supportive of Saddam and the 35-year Baath Party regime toppled by the U.S.-British invasion force in April.

The 4th Infantry Division reported at midday Wednesday that a U.S. combat patrol came under attack overnight and returned fire, killing one attacker, then stormed a building where others fled, killing another Iraqi. A third Iraqi was wounded, and eight were detained, the division said.

Factional tensions in Iraq's Shiite Muslim community also were on simmer.

Armed supporters of firebrand cleric Muqtada al-Sadr staged protests Wednesday near the great shrine of Imam Ali in the holy city of Najaf, as gunmen of a rival faction loyal to Grand Ayatollah Ali Hussein al-Sistani, Iraq's top Shiite cleric, watched from rooftops in the southern city. The protesters later dispersed peacefully.

In Karbala, another Shiite religious center, coalition troops diverted traffic away from the city. Worshippers trying to enter the two main mosques were searched at least three times by security officials.

Al-Sadr has demanded the Americans set a timetable for withdrawing from Iraq. Other clerics, such as al-Sistani, have shown greater patience with the U.S. presence, after decades of Shiite repression under Saddam.

Saddam's portrait was added to Iraq's domestically printed currency after the 1991 Gulf War. The new bills, produced in Britain in hues of purple and green, feature illustrations of historical themes similar to dinar bills of two decades ago.

The bills come in six denominations — 50, 250, 1,000, 5,000, 10,000 and 25,000. The dinar's value dropped to about 4,000 for a dollar during the war but has rebounded to about 2,000 per dollar.

The one-to-one exchange of dinar notes will provide no major boost to the crippled economy, other than eliminating a severe counterfeiting problem. The new bills have anti-counterfeiting features.

"This is great: getting rid of the counterfeit problem and Saddam Hussein at the same time," said food wholesaler Ali al-Khaby, waiting with a stack of 7.5 million old dinars — about $3,750 — at a bank branch. "We really had a lot of problems with counterfeit 250-dinar notes," he said. The notes were equivalent to 12 cents.