FALLUJAH, Iraq (AP) âÄî The Americans are gone from Fallujah, but the “King of Kentucky Chicken Restaurant” is open for business in a bullet-pocked building. The city that suffered some of the bloodiest episodes of the Iraq war is back under Iraqi control and bursting with entrepreneurial energy, from music stores and restaurants to workmen digging trenches for a long-delayed U.S.-funded sewage network. But much war damage remains untended, unemployment runs high, farming has fallen into neglect and there are constant fears that the insurgents who waged war are waiting for the right moment to rekindle the conflict. This city of 400,000 was the heartbeat of the uprising that followed the U.S.-led invasion of Iraq âÄî notorious for bombings, the killing of 17 people when U.S. paratroopers fired on protesters, and the ambush in which the burned bodies of four Blackwater security company men were hung on a bridge. In November 2004, with Fallujah in insurgent hands, the U.S. military launched an operation to recapture the city. After 45 days that saw some of the heaviest urban combat for Americans since the Vietnam War, the U.S. announced it had crushed the last pocket of resistance in Fallujah. Of at least 225 Americans who have died in action in Fallujah since the invasion, 78 were killed in the final operation, according to Pentagon figures. Insurgent losses were estimated at about 1,350. U.S. forces continued to control the city tightly until last month, when they quit the last of their posts inside Fallujah. Now the city 30 miles west of Baghdad is a testing ground for the Iraqis’ ability to keep the peace unaided. Security is uppermost in people’s minds here, their worries heightened by two suicide bombings in the Fallujah area this month that targeted Sunni clan leaders who fought against the insurgents. One of the bombers was thought to have recently been freed from Camp Bucca, the U.S. detention center in southern Iraq. Thousands of detainees have been freed from U.S. custody in recent months to comply with a U.S.-Iraqi security pact that took effect on Jan. 1, and there are fears some of them will try to join up with al-Qaida sleeper cells. “Bucca has reinforced their extremist ideology since the most radical detainees are kept together away from the rest,” said Mushtaq al-Eifan, a prominent clan member who fought al-Qaida. However, Fallujah is relatively calm, though its notoriety appears to endure. Mayor Sheik Hameed Hashem says he is struggling to staff to capacity a $46 million, 200-bed hospital just built with government funds because of misconceptions about security in Fallujah. He is promising housing and police protection for out-of-town doctors who agree to work at the hospital. Meanwhile, as Fallujah recovers some of its traditional vigor as a transport and trade hub, it is feeling pressures of a different sort âÄî falling oil prices. Hashem says his 2009 budget has been slashed by two-thirds to around 50 billion Iraqi dinars (about $43 million) because of the slump in oil earnings that underpin government revenue. With unemployment at about 30 percent, he said he needs money for industrial and farming projects to create jobs. Also, he said he needs to build a power station as the government provides only 25 percent of Fallujah’s electricity needs and the rest comes from private generators. Still, in ways both big and small, the city is struggling back to normalcy. Along with the $100 million sewage network, construction of a stretch of elevated highway appears to be moving ahead. Music shops, torched or forcibly shuttered as un-Islamic during the seven months of 2004 that al-Qaida and its allies controlled the city, are open again. Hashem said the U.S. paid $150 million compensation for 35,000-40,000 homes damaged or destroyed in fighting and that they have been repaired. Ismail Haqi’s “Kentucky” restaurant, its name posted in Arabic with two large images of Colonel Sanders, opened two months ago on a main street of Fallujah and offers a meal of chicken, fries and soda for the equivalent of about $4.50. The restaurant is inspired by âÄî but not connected to âÄî the American-based KFC. “I decided to bring to Fallujah a global name,” said Haqi, 19. “Some people come up to me and say ‘this is an American company and we suffered so much in Fallujah at the hands of the Americans.’ But I tell them that Kentucky exists across the world, so why not here?” Some seem unready to put the fighting behind them. Several mosques still show the damage they suffered in the fighting, and Fallujans believe they are being deliberately left in disrepair as protests against what they see as the brutality of the 2004 U.S. offensive. Col. Mahmoud al-Issawi, Fallujah’s police chief, is more worried about al-Qaida and other militants using Fallujah as a refuge from U.S. and Iraqi search parties. Al-Issawi, an energetic man in his mid-40s, said that in the five months since he took the job, his force has uncovered more than 200 arms caches in the Fallujah area, including roadside bombs, rockets, firearms and walkie-talkies which can be used as detonators. Speaking at his heavily guarded office, he also voiced concern about the prisoner releases. He said 260 detainees from Anbar, Fallujah’s province, were about to be freed from Camp Bucca, the largest U.S. detention center. “I want them released into our custody and not to politicians in Baghdad. I will arrest those that I have evidence against and let the rest go free,” he said, showing a list of the 260 men and their photographs. “These people are filled with hatred and terrorism and they will want to come back and exact revenge,” he said. “They may be tempted now that the Americans are gone.”