A former officer of Saddam Hussein's Republican Guard has been appointed to form a military unit to stabilise the Iraqi town of Falluja in agreement with US forces.
In what appeared to be a reversal of Washington's policy of excluding members of Saddam's Baathist regime from power,
said his force would help police and other Iraqi security forces bring order to the town.
The commander of the US marines, who were pulling back from siege positions around the city of 300,000, was quoted as saying the former commanding general of Saddam's 38th Infantry Division would lead a force of about 900 mostly former Iraqi soldiers to replace the US forces.
Hundreds of people cheered the former general, who lives in the city, as he made his way into the town centre in uniform in the early afternoon.
A relative said he had been chief-of-staff of a brigade of Saddam's Republican Guard, an elite force that put up the main resistance to US invading forces a year ago. Senior officers were all expected to be members of the ruling Baath party.
Marines pulled back from positions along the southern and western edges of the city. But they appeared to hold on to strong points dominating the Golan district to the north, where they have fought fierce battles and called in bombers.
It was unclear what influence the new Iraqi force in Falluja has over the estimated 2,000 or so guerrillas, some of whom US officials say are diehard Saddam supporters in a city once fiercely loyal to his minority Sunni-dominated regime.