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 — U.S. forces in Baghdad know that it will take more than imposing a security crackdown, imprisoning suspects and killing militia fighters to win over Iraqis to idea of democracy. It will take rebuilding their community.

In that vein, Task Force Gold and military partner Task Force 1-6 have thrown themselves into fixing up one of Baghdad's notoriously neglected and run-down neighborhoods.

They have have given themselves one month to make a tangible difference in one-quarter of the Shiite slum of Sadr City —a hotbed of militant resistance and the site of fierce gunbattles.

Click here to see photos from inside Sadr City.

It is no small job, and they are working at a frenzied pace.

"It's critical," said Task Force 1-6 Cmdr. Lt. Col. Brian Eifler. "That's why we have a 30-day window to get in, control it and just turbo-charge the area with money, with jobs, with reconstruction ... and make them feel secure."

Two months of fierce conflict in and around Sadr City left parts of it a smoking wreck. Under the terms of a truce signed early last month between the Iraqi government and extremist Shiite Muslim cleric Muqtada al-Sadr, who controls the area, U.S. forces are operating in the bottom quarter of Sadr City.

Although this area is still decrepit in parts, it is considered the "wealthy" end of the Baghdad district and contains Jamila Market, the largest food wholesale market in Iraq.

The market — which draws millions of dollars every week and has some very successful businesses — is also battling with the criminal elements that control Sadr City. Al-Sadr's Jaish al-Mahdi, or JAM, regularly "taxed" market traders to the tune of more than $1 million a month.

U.S. military commanders believe that civilians, tired of living with militants in their midst, are the key to turning a community against terrorism, and they are trying to win them over with projects that will improve living conditions.

So far, there have been 86 contracts for improvements, including sewage repairs, road pavement, parks, swimming pools, school and municipal building renovations, streetlights and a Shiite version of the "concerned local citizens' patrols" — called the Neighborhood Guard in Baghdad.

The U.S. military allocated $14 million for such services, with more to come. The Iraqi government has also set up a Sadr City reconstruction fund of $100 million, although they have yet to start spending that money.

None of the U.S. allotment will go to address problems in the 75 percent of Sadr City that is arguably in greater need of help. But it's thought that if they can create a foothold in their southern district, local residents will see what the payoff from peace could be, and they'll be less likely to support attempts by militants and criminals to re-infiltrate the area.

It is a new concept for many people who have never known the government or military to look after their interests.

But now, as American troops shift focus to rebuilding, they're finding themselves in a new war zone: a battle for the control of resources.

Local Iraqi officials — faced with the most significant investment Sadr City has seen in perhaps 40 years — are already taking issue with the way the American military is choosing to spend the money.

Task Force Gold, which selects Iraqi contractors to work on infrastructure projects, has been battling locals who say the U.S. isn't choosing enough local contractors. Local leaders say this will take money out of the community and won't give its citizens opportunities to learn badly needed skills.

Locals are also criticizing the U.S. for prioritizing the wrong projects.

"We need apartments more than anything else," Sadr City District Councilor Hassan Shama told FOX News. "Do you know that in some parts of the city, we have more than 30 family members living in an area of 1000 square feet?"

Shama also claims that the Iraqi Department of Education and the U.S. military are doubling up on contracts to rebuild schools, meaning some projects would end up being done twice.

"There is corruption in every country, but there is more in Iraq," said one contractor from the Jamila Market area. "Nobody tried to bribe me, personally ... but I see the people trying to work. And the contractors and the obstacles [are] slowing down their work. All Iraqis know there is corruption. Even the government knows that."

U.S. soldiers who negotiate contracts told FOX News that they, too, have seen that corruption. Some say they have been offered bribes and have promptly thrown the offenders off base.

But an even greater concern, U.S. military leaders say, is that U.S. funds may get into the hands of the Jaish al-Mahdi.

On Tuesday JAM is believed to have orchestrated an attack on Shama, who, despite his criticism of U.S. military decision-making, had still been fighting to bring improvements to Sadr City.

Shama remains in hospital after a bomb was placed by a rival politician in retaliation for losing his position of influence. Two American civilians who were working with him were killed, along with two U.S. soldiers guarding them.. Many others were injured

The vested interests in Sadr City, it is believed, are not going to go away quietly.

Click here to read more on America's Future.