Bush admits failures as city shows signs of recovery

"Katrina exposed serious problems in our response capability at all levels of government," Bush said at joint White House news conference with the president of Iraq. "To the extent the federal government didn't fully do its job right, I take responsibility."

In New Orleans' port, the first cargo ship to arrive since Hurricane Katrina more than two weeks ago was docked and unloaded.

The arrival of commodities from abroad was seen by economists and government officials as a positive sign that the broader economic impact of the storm and its aftermath can be kept small enough to avert a major recession or upheavals in world trade.

It was, however, only a symbolic first step in what is likely to be a long and painful process. The port itself suffered structural damage, and the collapse of the levee system has significantly changed the shape and depth of the approach to the port along the Mississippi.

Most seriously, the workers who might otherwise help restore a port handling at least 10 per cent of America's energy needs and many of the grain exports sent down the Mississippi from the wheatfields of the Midwest have been scattered around the country. Even if they returned to work, most of them would have nowhere to live because their homes have been waterlogged or destroyed.

For now, about 40 port workers are being housed in a crane ship that arrived from Texas last week. Three ships with room for about 1,000 more people are due to arrive shortly.

Reviving the port - an asset so strategic it was the first place German U-boats intended to attack in an assault on US soil during the Second World War - has clearly been a priority at every level of government, and port officials expressed satisfaction that they were restarting operations so soon after initial forecasts of months of inaction.

"The river is still here. The railroads are still here. All the parts that make our port great are still here," the port director, Gary LaGrange, told The Times-Picayune newspaper.

The resumption of cargo operations coincides with the limited reopening of New Orleans airport to freight and some passengers.

The optimism is almost certainly premature, however, in a city that was 80 per cent submerged. The focus on economic assets has only added to the fears of many local commentators that New Orleans will be restricted in future to a Disneyland-like tourist area spanning the French Quarter, downtown and the finely appointed houses of the Garden District - all unaffected by the flooding.

It seems clear that many residents, especially the poor, will not be returning - because their houses are gone, the job prospects are uncertain, and many of them are now scattered around the country. That could have a profound effect on the city's unique culture. Andrei Codrescu, the Romanian poet and novelist, now living in Baton Rouge, told The New York Times: "I am sure the city will be re-engineered, but I am afraid that in the process it will lose its soul."