The weapon of choice - badly needed public works projects.
First Lieutenant Shawn McKinney is an engineer with Task Force Gold which is rebuilding the Southern end of Sadr City. He took CBS News on a tour of his projects.
"Everything is going to be repaved, the sewer's going to be cleaned out as part of the project," said McKinney. "Manholes raised along with the new road. A lot of work."
And that will make a big difference. On hot days in Sadr City now, children swim in filthy water right next to ponds filled with raw sewage.
Getting those kids into decent classrooms is another project.
McKinney works closely with Iraqi contractors on school renovations, which creates jobs for local workers and will hopefully build support in the community.
U.S. officials insist the Iraqis are starting to spend their own money on projects here and in the northern part of Sadr City where a ceasefire agreement prevents Americans from operating. They're in a hurry to get things done while the ceasefire with Sadr's militia holds.
"One of the intents of the work that we do is to show that in the areas that we are, by working with us, by being part of the government, by being part of the solution, good things happen, things get better," said McKinney.
Off camera, U.S. soldiers told CBS News they were surprised that Moqtada al Sadr didn't launch an aggressive social welfare program of his own. They hope they can hold onto that advantage in the months ahead as the political battle for Sadr City intensifies.
Protest Against Security Pact Draws Thousands
On Saturday, al-Sadr urged Iraq's parliament to reject a pact that would extend U.S. presence in Iraq for three years as tens of thousands of his followers marched through Baghdad's streets Saturday to reinforce that demand.
The large turnout points to trouble ahead for the U.S.-Iraqi security deal as Sunni and Shiite lawmakers weigh the political risks associated with the far-reaching agreement.
Waving Iraqi flags and green Shiite banners, protesters chanted slogans condemning the pact. The demonstration in the mostly Shiite eastern part of Baghdad was staged under tight security, with soldiers and police manning checkpoints along the route.
"I am with every Sunni, Shiite or Christian who is opposed to the agreement ... and I reject, condemn and renounce the presence of occupying forces and bases on our beloved land," al-Sadr said in a message read to the crowd by a senior aide.
The pact, reached after months of bitter negotiations, governs the presence in Iraq of U.S. troops after their U.N. mandate expires Dec. 31. As copies of the draft became available this week, it sparked an intense public debate among top politicians.
A copy of the draft accord obtained by The Associated Press specifies U.S. troops must leave Iraqi cities by the end of June and be gone by 2012. It gives Iraq limited authority over off-duty, off-base U.S. soldiers who commit crimes. U.S. Congressional approval is not required for the pact to take effect, but the Bush administration is trying to build maximum political support anyway.
In Iraq, the pact must be ratified by the 275-seat parliament - riven by the narrow partisan interests, sectarian and ethnic divisions that have defined Iraqi politics since the 2003 ouster of Saddam Hussein.