You have only to step inside Saddam Hussein's old palace complex - where coalition officials trying to rebuild Iraq are based - to see that the task is way beyond them.

When the civilian administration of the ORHA (Office of Reconstruction and Humanitarian Assistance) first arrived there, it was said there was only one working shower for 800 people. The situation has improved a little now, but they work in sweltering offices and sleep five or six to a room.

There are no telephones on the desks, and the real world of looted buildings and car thefts outside the palace is a distant prospect. No one is allowed out without an escort of soldiers. As there are not enough escorts, there is a strict pecking order and most staff must stay inside, behind Saddam's high walls.

A journalist asked a staff member on a satellite telephone for local directions in the capital. "I've no idea," she replied. "I've never been outside since I got here."

News travels slowly into the palace. Barbara Bodine, the United States official in charge of Baghdad who is being recalled to Washington, was unaware 24 hours after the event that US soldiers had shot dead more than a dozen Iraqi protesters in Fallujah a fortnight ago - the most serious incident since the end of the main conflict.

More than a month after the fall of Baghdad, the city still has no authority - no mayor and practically no police on the streets - while looters continue to pillage government buildings and honest folk keep their daughters at home for fear they will be abducted by armed thugs.

British officials admit that the ORHA is a mess. Jay Garner, the retired general who was in charge, is expected to leave shortly after the new top civilian administrator, Paul Bremer, arrives today. Lt Gen Garner is a poor spokesman and his public performances have done nothing to allay the sense of drift.

Not all the fault is his. The ORHA was set up to deal with a humanitarian disaster, with tens of thousands of refugees and cholera epidemics. This did not happen. Nor did the more rosy scenario touted by the CIA, that the Saddam regime would be decapitated, leaving everything in working order.

Instead, the Americans are dealing with a population that does not feel defeated in battle and expects the soldiers to make everything go right instantly. But until there is security, very little can be done. Electricity repair teams are afraid to go out because their vehicles are hijacked by armed gangs.

Yesterday, the central telephone exchange - a central landmark knocked out of action in the war by cruise missiles - burned all afternoon. One fire engine came to attend the blaze, but had little effect on the flames. A handful of US soldiers kept back angry crowds taunting them that they were to blame for the fire. No one knows who started it, but it was probably arson committed by anti-American provocateurs.

"We could solve the insecurity problem at a stroke by shooting on sight any looter," said a coalition official. "But we are supposed to be setting up a modern civilized state. What kind of message would that send?"

It was clearly not in the ORHA's plans to face the 100,000 criminals let out of jail by Saddam in the run-up to the war, nor the remnants of the Saddam regime. Mr Bremer will have an easier task than Gen Garner. As he is superior to the military, he will be able to tell the generals where to put their tanks and which buildings to guard.

But he will still have to find competent men, not tainted by the old regime, to take charge of key ministries. A succession of would-be police chiefs have been told to stay at home.

Yesterday, Dr Ali Shenan, who was named to head the health ministry last week, was asked to step down. He embarrassed the ORHA at a news conference by refusing to disavow Saddam's old ruling Ba'ath Party, of which he had long been a member.

His departure ought to be a triumph of democracy. But with fires burning unchecked in the city center and looters roaming freely, the incident looks like another case of the ORHA struggling to cope.

© Copyright of Telegraph Group Limited 2003

###