Iraq Handover An Illusion?

On the streets of Baghdad the transfer of power may be seen as nothing more than an illusion.

"The Americans will stay and control everything and play the game as they planned," says one Iraqi citizen.

But, as CBS News Anchor Dan Rather reports, behind the heavy security cordons, in buildings that formerly housed Saddam Hussein's cronies, a new fledging Iraqi government is emerging.

But is it independent of American control? The question was put to Iraq's interim Prime Minister Iyad Allawi.

The critics say he is only there because the United States put him there, and that he is a puppet.

"I respect my friendship to the U.S. and (what) the international community has done in liberating us and helping us to reconstruct our country, but I am not a puppet of anyone," says Allawi. "My loyalty is to the Iraqi people."

To get that loyalty, Allawi is going to have to move fast. He might be in control of the government but he's not in control of the streets.

"He'll have to do something, otherwise we are dead people because we have no life," says one Iraqi woman.

Allawi's problems are bureaucratic as well. At Iraq's equivalent of the motor licensing department, processing is done on the couch because looters took the office chairs along with the filing cabinets.

It's not as bad at the Ministry of Trade where the office furniture is still intact but so are the former dictator's diehards. Mussab al Kateabah is an American advisor who is trying change the dogma of dictatorship.

He says he's had "marginal success."

Kateabah is an American-Iraqi. He returned to his country of birth with the dream of introducing new ways of thinking - American ways of thinking. That dream is haunted by the specter of Saddam.

"Saddam Hussein's spirit walks the halls every day and every minute of the day or any other day," says Kateabah. "The country is cast in the Saddam mold."

But Saddam did at least leave one valuable legacy.

The Minister of the Interiors office is in a former bunker that belonged to the dictator. As the overall head of the Iraqi police force, he needs as much protection as he can get.

Since the regime fell, about 600 police have been killed.

Despite the deaths and terrorism, the new interim government will survive. Its future underpinned by 150,000 American troops who will be stationed in Iraq for years to come.