Most of the men, about seven hundreds, positioned in the town, situated on the Euphrates river, belong to the Iraqi National Congress (INC), one of the six main Iraqi opposition exile groups recognised by Washington.

In an operation that looks like a remake of the "parachuting" of Mr. Hamed Karzai, the present Afghan Prime Minister in area near Qandahar by the Americans just days before the fall of the Taleban in 2001, Mr. Ahmad Chalabi, the 58 years-old leader of the INC, who is a protégé of both vice-President Dick Cheney and Defence Secretary Donald Rumsfeld, has established headquarters in Nasserieyh.

A former banker of Shi’iate faith, Mr. Chalabi does not have much influence and popularity with other Iraqi opposition groups, including the Shi’a, who are suspicious of his close relationship with Washington.

According to American officials, the men deployed in Nasserieyh, most of them armed and serving in what has been tentatively named as "Free Iraqi Forces" (FIF), would form the "nucleolus" for Iraq’s future army.

"These are Iraqi citizens who want to fight for a free Iraq, who will become basically the core of the new Iraqi army once Iraq is free", General Peter Pace, vice chairman of the Joint Chiefs of Staff told ABC television

"But by now, they would help distribution of humanitarian services to the population and serving as translators and link between local people and the coalition forces", the sources explained.

The group, in a statement sent to the French News Agency AFP in Dubai said that it has sent 700 fighters to southern Iraq to join in "removing the final remnants of Saddams Ba’athist regime."

Mr. Chalabi, one of the six Iraqi leaders to form a post-Saddam Provisory Government is in Nasseriyeh and has already met local dignitaries and tribal leaders to assess the people's needs, INC leaders said.

Mr. Shibley Telhami, a Middle East expert at the Brookings Institution said the INC deployment inside Iraq reflected the ascendancy in the United States of the group's allies in the Pentagon and this should ensure the opposition movement has a significant role in the next government.

Chalabi's prominent role could be a blow to the Iraqi plans of the State Department and the Central Intelligence Agency, which have argued that he has no standing inside the country, observers said.

They say the State Department is also wary of the Iraqi opposition's commitment to federalism, in case the Iraqi Kurds retain their autonomy and set an example for how Turkey should treat its own large Kurdish minority.

The State Department, which has a stormy relation with Chalabi, denies the allegations. It has sponsored instead Iraqi technocrats in exile whom it had planned to insert into Iraqi ministries under U.S. supervision.

The exiled groups, who are divided among them, worry that there is no place for them in US plans to install a military governor and civil administration for post-war Iraq.

Glad at the prospect of the overthrow of President Saddam Hoseyn but deeply suspicious of US motives, some say they will resist foreign occupation.

In a statement made in Belfast, Northern Ireland, after meeting with British Premier Tony Blair, President George W. Bush said the Administration in Baghdad would be handed over to the Iraqis themselves.

And Defence Secretary Paul Wolfowitz, who oversee American plans for after the war in Iraq reiterated on Sunday that the United States wants to hand over the country to the Iraqi people.

Ayatollah Mohammad Baqer al-Hakim, the leader of the Tehran-based Supreme Assembly for the Islamic Revolution in Iraq (SAIRI) is reported to be considering moving to Najaf, on of the Shi’ite’s most sacred cities which is also a historic centre of education for the Shi’a.