Iraq pilgrims head home, suicide bomber strikes

BAGHDAD/KERBALA, Iraq (Reuters) - Hundreds of thousands of Shi'ite pilgrims streamed home from Iraq's shrine city of Kerbala on Sunday at the end of an annual holy rite that passed without the factional violence that marred it last year.

But a major suicide bomb attack on U.S.-backed neighborhood guards in a Sunni Arab area of northern Baghdad served as a reminder of entrenched violence in the country.

The bomber rode on a bicycle to a checkpoint manned by the guards in the Adhamiya neighborhood and detonated an explosive vest, killing 15 people and wounding 29. Among the dead was a leader of the guards in the area, Faruq Abu Omar.

Police had earlier said the bomber rode a motorcycle.

"I carried my nephew in my arms to the hospital. He was alive until we reached the hospital and his blood stained my clothes," Abu Omar's uncle, Ahmed Abu Uday, told Reuters by telephone, his voice breaking with tears.

The guards, known as "Sons of Iraq", are paid by U.S. forces to protect neighborhoods in areas where the local tribes have turned against al Qaeda Sunni Arab militants. The militants frequently strike their checkpoints.

"What happened is what we feared would happen, because this area was the stronghold of al Qaeda in Adhamiya. We killed them, we captured them. We destroyed them. And we expected they would seek revenge," said Abu Uday.

AL QAEDA STILL ABLE TO ATTACK

Iraq has become far less violent over the past year, but U.S. and Iraqi forces say al Qaeda retains the ability to carry out car bombings and suicide attacks.

Sunni militants are suspected of being behind strikes which killed more than 30 pilgrims heading to the Shi'ite Sha'abiniya rite, including a suicide bombing on Thursday in which 19 died.

But the ritual itself in Kerbala was peaceful, authorities said. Last year Shi'ite militia and police clashed during the pilgrimage, leading to major gun battles in Kerbala's streets.

At the conclusion of the rite overnight, believers crowded the banks of a river that flows into the Euphrates, floating lit candles on the water under a full moon.

Pilgrims then began to pack into buses to leave Kerbala, 80 km (50 miles) south of Baghdad, which was under the tight watch this week of some 40,000 Iraqi police and soldiers backed by snipers, helicopters and bomb-sniffing dogs.

The birthday of the ninth century Imam Mohammed al-Mehdi is one of several annual pilgrimages that have evolved into shows of strength for Iraq's majority Shi'ite community since the fall of Sunni Arab dictator Saddam Hussein, who curbed such rites.

Previous pilgrimages have seen some of the highest-profile attacks of the war.

But there was no repeat of last year's Shi'ite factional fighting which turned the area around the shrine into a battle zone for days and prompted influential Shi'ite cleric Moqtada al-Sadr to declare a ceasefire for his Mehdi army militia.

A decline in overall violence in Iraq and government coffers swollen with oil wealth have raised hopes the country can finally undertake much-needed reconstruction projects.

International oil companies are eager to get their hands on the world's third largest oil reserves, which have been off limits to them for decades.

But a U.S. diplomat in Baghdad said the first contracts -- six short-term oil deals expected to be worth up to $3 billion total -- are likely to be scrapped. The deals are less lucrative for the oil companies than long-term deals which are due to go up for tender next year, and negotiations have stalled.

"It appears that on present form (the Iraqi government) probably won't proceed with most of these or all of them," Charles Ries, coordinator for Iraq's economic transition at the U.S. embassy, told reporters in Baghdad.

(Reporting by Wisam Mohammed in Baghdad and Sami al-Jumaili in Kerbala; additional reporting by Aws Qusay, Missy Ryan and Wathiq Ibrahim in Baghdad; Writing by Missy Ryan and Peter Graff; Editing by Catherine Evans)