The shops and the market are open, and everybody can go and come back to their homes safely.
The vast Shiite slum of 3 million, which from time to time experiences big bombing attacks like one that killed dozens of people last Saturday, is still one of the most secure areas in a city ravaged by violence.
It's not because of Iraq's police or the U.S. Army; it's because of the local men, with weapons out of sight, who enforce order on every street. They are the Mehdi army, a militia founded by Shiite cleric Moqtada al-Sadr, a man who has twice sent gunmen into battle against the United States.
To Sadr City's Shiites, the Mehdi army are their protectors. But to Iraq's Sunni minority, they are the executioners behind most of the sectarian killings dividing Iraq.
A young Mehdi army fighter tells CBS News that the Mehdi army is doing everything in Sadr City that the Iraqi government is not doing. The Mehdi army is responsible for security, for justice and for social services, he says. In that way, the army is operating much like Lebanon's Hezbollah.
Moqtada al-Sadr's local government was in action at a social services office, where officials were handing out supplies to people in need. There were three women outside the office, all desperate and penniless. They said they had nowhere else to go.
"Moqtada is very good with us," one woman says. "Everything comes from him."
The more powerful al-Sadr becomes, the more of a problem he is for the United States. He's part of the most powerful faction in the Iraqi parliament and now controls four ministries, including health.
In fact, U.S. officials say Iraq's entire health care system has been hijacked by Sadr's Mehdi army militia. Mehdi gunmen now guard hospitals across Baghdad and it's Sadr — not the government — who gets the credit for all medical services provided.
"We thank al-Sadr's department because they help these people," Dr. Haider says. "They do everything for them."
The U.S. military has been reluctant to tackle Sadr and his militia head on because of the power he wields both in government and on the street.
But U.S. and Iraqi leaders agree sectarian death squads are now the No. 1 threat to Iraq, and all militias, including the Mehdi army, have to be disarmed.
One Mehdi Army fighter said that if the Iraqi government were to say they have to give in their weapons, they would talk with the government. But the fighter says it would "never happen" that the government would say there could be no more militias.
If he's right, it may be impossible to stop this increasingly divided country from splitting along sectarian lines.