This is part of the America's Future series airing on FOX News Channel, looking at the challenges facing the country in the 21st century.

BAGHDAD, Iraq — Even as fighting continues to rage in the radical Shiite hotbed of Baghdad's worst slum, the U.S. State Department and the U.S. military have worked to keep open the doors to the Iraqi Assistance Center, which gives locals financial assistance and help getting back on their feet.

The U.S. military has doled out more than $180,000 in compensation since April to Sadr City residents who can prove their home and property were damaged in the crossfire between U.S. and Iraqi troops and the Shiite militia that controls the area.

To receive funds locals must demonstrate legal ownership of the damaged property and prove personal injury, if applicable. They also must provide dates of when the purported destruction occurred.

"We do a lot of research," said Sgt. Brendan Piper, head of the IAC. "They give us a claim on this date, at that time, and we do research on significant actions to determine whether on that date there was a firefight which could have caused the damage."

The goal behind the center, which is inside the main U.S. Iraqi base in the city's southern quarter, is to build a cooperative relationship between Iraqis and U.S. soldiers. As locals feel safer, they increasingly pass on useful information to soldiers about potential insurgent activity.

While it took some time for word of the IAC to spread, locals are now lining up in droves.

To date, nearly one thousand claims have been filed, and over one hundred have been paid out.

Iraqi attorney Muhaned Abdilrada, who works in IAC's claim office, is kept busy ensuring that inflated claims are not accepted.

Click here to see photos from inside Sadr City.

"If there is any document I feel suspicious about, I will tell the person to take it away and have it verified by a legal government department, whether it was a hospital, or a police station or a court," Abdilrada told FOX News. "If we find out that a lease is faked, we will deny the claim."

The average claim is approximately $1,700. While that may seem high for the run-down neighborhood, the area is also home to Jamila Market, the largest wholesale food market in Iraq. Many of the shops are overloaded with food and goods, forcing IAC officials to revise their assessments several times.

"When someone came in and claimed $100,000 for their shop, we were thinking, 'No way,'" said Army Sgt. Brendan Piper, a civil affairs specialist. "But once again, the Iraqi lawyer came into play. The amount of inventory they actually have in these small shops is amazing, the way they stack and pile their goods," Piper said.

While working with U.S. forces remains risky to Iraqis, especially in areas like Sadr City where collaborators are still being attacked, Abdilrada enjoys his role.

"I like working with coalition forces," he told FOXNews. "[M]y job requires helping people. I'm honored to be a part of compensating people for the damage caused by U.S. forces. This gives me joy to bring a smile to my people."

Abdilrada added, "If I do not make sacrifices, and others don't make sacrifices, who will stay in this country and stand up for this country?"

The entire claims process is complex, as many streets have endured multiple strikes from all three parties involved — U.S. forces, Shiite militia and the Iraqi Army. Still, the U.S. military has maintained a generous viewpoint regarding claims, ultimately deciding that they'd pay even if they were just one of several sources of the damage.

"There are innocent people caught in the crossfire," Piper said. "It's important for those people to get compensated. A lot of the damage is happening because we are here."

Some locals, though, still try to pass fraudulent claims. IAC officials recently recalled an elderly woman who submitted clumsily altered images depicting war-torn scenes from a local newspaper.

"We laughed," Piper said. "And she knew it."

Beyond monetary compensation, the claims center was set up by U.S. officials who see it as a model of how assistance programs can be set up by Iraqis themselves.

IAC officials also want Iraqis to begin demanding increased accountability from their own authorities. The Iraqi Army has signaled interest in establishing a similiar office to compensate citizens from damage caused by Iraqi forces, but so far, no such entity has been created.

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