Such is the murderous state of affairs in Iraq at the moment that the demand, made by a militia gunman who is also believed to be a member of the Special Police Commandos, hardly caused a stir.

There was a similar lack of shock when a dozen bodies were brought in with identification cards showing that each had the name, Omar. The catch here was that Omar is a Sunni name and simply this fact had sealed their fate at Shia checkpoints.

And Baghdad is full of checkpoints. Leaving the Hamra Hotel, where the dwindling band of journalists outside the Green Zone stay, means negotiating the Badr Brigade; their Shia competitors the Mehdi Army of Moqtada al-Sadr; and the Kurdish peshmarga. And the Iraqi police and government paramilitaries have their own barriers.

And there are others: the Shia Defenders of Khadamiya, set up by Moqtada's cousin Hussein al-Sadr, and the government-backed Tiger and Scorpion brigades. They all have similar looks: balaclavas or wraparound sunglasses and headbands, black leather fingerless gloves, and a lethal arsenal of weapons. When not manning checkpoints they hurtle through the streets in four-wheel drives, firing in the air. Out of sight they are accused of arbitrary arrests and extrajudicial killings.

This is a shadowy struggle which involves tortured prisoners huddled in dungeons, murder victims mutilated with knives and electric drills, and distraught families searching for relations who have been 'disappeared'.

Iraq's savage sectarian war is now regarded as a greater obstacle to any semblance of peace returning than the insurgency and was the main reason for the Americans recently pouring in 12,000 troops into the capital . . . an operation which they now acknowledge has failed.

Yet, ironically, the death squads are the result of US policy. At the beginning of last year, with no end to the Sunni insurgency in sight, the Pentagon was reported to have decided to train Shia and Kurdish fighters to carry out 'irregular missions'. The policy was called the 'Salvador Option' after the USbacked counter-insurgency in Latin America over 20 years ago that led to 70,000 deaths and countless instances of human-rights abuse.

Some of the most persistent allegations of abuse have been made against the Wolf Brigade, many of whom were formerly in Saddam Hussein's Baathist forces. Their main US adviser until April last year was James Steele who, in his own biography, states he commanded the US military group in El Salvador during the height of the guerrilla war and was involved in counter-insurgency training.

The complaints against Iraqi special forces continue. At the end of last year I interviewed Ahmed Sadoun who was arrested in Mosul and held for seven months before being released without charge. During that time, he said, he was tortured and showed marks on his body which were the result of the beatings and burnings. Sadoun (38) did not know which paramilitary group, accompanied by American soldiers, had seized him, but the Wolf Brigade was widely involved in suppressing disturbances in Mosul at the time.

Sadoun fled to Amman to escape further official attention. His family, however, stayed behind in Mosul, and last month his 27-year-old brother, Rashid, was arrested by paramilitaries, His body, shot in the head, was dumped on a stretch of waste ground five days later.

As the US and British policy in Iraq reaches the last stages of unravelling, there are increasingly frantic calls to prime minister Nour al-Maliki from Washington and London to reign in the government-sponsored death squads. The problem is that the militias, well-armed and entrenched, are connected to political parties who know al-Maliki depends on their support.

Two violent incidents last week illustrated the extent of the grip the gunmen now have on Iraqi society. US and Iraqi forces went into Sadr City, the vast Shia slum on the outskirts of Baghdad, to capture, according to the military, "a top illegal armedgroup commander directing widespread deathsquad activity".

Instead of congratulating the troops, prime minister al-Maliki angrily complained he was not told about the operation. "We will ask for clarification of what happened in Sadr City. We will review the issue with the multinational forces so that it will not be repeated, " he said.

Al-Maliki, needless to say, needs the backing of Moqtada al-Sadr, who controls Sadr City. Falan Hassan Shansai, leader of the Sadr bloc which has 30 of the 275 parliament seats, warned of the consequences if such action was indeed repeated.

In the south, 800 members of the Mehdi Army in black uniforms stormed Amarah, the capital of Maysan province recently vacated by the British, and took over the city. Dozens were killed in the fighting, while around 500 British forces were put on standby in Basra but did not intervene. Moqtada's men left after blowing up three of the main police stations.

The Mehdi Army does not always have to resort to violence to achieve its aim. In districts it controls, like Hurriyah in northwest Baghdad, owners of properties are simply told they are being taken over and red crosses are painted on the premises as a message that they have a few days to leave.

Sergeant Jeff Nelson, an intelligence analyst with the US army in Baghdad, said, "They have infiltrated every branch of public service and every political office they can get their hands on. As soon as the US leaves, they will be able to dominate the area with key citizens, key offices. They'll pretty much have the lay of the land."

One reason al-Maliki was not told about the Sadr City raid was that in the past it has led to the targets being warned off . Earlier this month the Americans received intelligence about a Shia militia torture chamber in Baghdad. Captain Kevin Sage, whose unit was due to raid the address, needed approval from the Iraqi authorities. This was delayed for several days; when it eventually came through the building had been abandoned.

Being arrested does not mean militia members will be kept in custody. Major Hussein al-Qaisi, a battalion commander in the Iraqi army, says he gets phonecalls from government officials when he arrests high-ranking militia leaders, both Sunni and Shia. "Sometimes they will back them up no matter what, and we just have to let them go, " he said.

Nelson said his battalion has investigated 40 sectarian killings and collected 57 bodies in one week.

None led to any arrest. "Sometimes we have a feeling of complete hopelessness, " he said.