On the streets of Baghdad, there are no heroes or villains. Only victims

Haider Tahab was so quiveringly angry that the blood vessels at his temples seemed ready to burst. He kept returning to deliver another blast of point-blank invective, as if driven by a compulsion that would only fully be relieved once he had hit someone.

Bobbing above the heads of the people crowded behind him was a crude wooden coffin, which they were trying to load on to the roof of a white mini-van. They seemed as furious as he. "Down Bush! Up Saddam!" he bellowed into my face. "The Americans have turned into murderers and thieves."

Scenes such as this, albeit with a different script, are commonplace in Gaza or the West Bank after a 36-year occupation in which thousands have been shot dead by the Israeli army. But we were in Baghdad only a month after the Americans had routed one of the most repressive and corrupt regimes of the modern age and promised a new era of democracy, freedom and prosperity.

As the crowd tied the coffin to the van's roof to be driven 100 miles south to the Shia holy city of Najaf for burial, Mahadi Mehsen drew a contemptuous comparison between the two occupied peoples. "We are not like the Palestinians," he said, shouting above the wails and cries of anger. "All of us will be Fedayeen. We will take revenge if they don't stop this."

We were drawn to this place by Mohammed Tahab, the man in the coffin. Haider Tahab and Ismail Ibrahim, his cousins, and Mahadi Mehsen, a neighbour, had come to mourn. I had come for answers to a question that first confronted us 33 hours earlier, when we saw him in his final hours.

At 2am on Wednesday, 14 May, we were in the casualty department of Baghdad's Al-Kindi hospital investigating a huge post-invasion rise in deaths and injuries from gun-shot wounds, which had killed several hundred Iraqis in Baghdad in just over three weeks. A battered orange Moskvich 408 car pulled up sharply. Two large severely injured men were hauled out of it and heaved on to stretchers. Mohammed Tahab, 30, had been shot in the face. His eyes were black and swollen and one was punctured but he was still breathing beneath his blood-soaked Iraqi Olympics tracksuit.

The other man, Haider Kassem, a corpulent 34-year-old labourer, had four wounds in the chest that were spouting blood. A third man, Salah Fayek, had a bandage swaddling his injured head. He insisted they had been shot from close range without provocation by an American patrol as they were sitting in an alleyway. He said he had been hit over the head with a rifle butt.

Adnan Kassem, Haider's brother, who said he was close to the group fired on - but ran for cover - would later tell a similar story. "The Americans didn't warn us. They didn't tell us what to do. They just started shooting." Ahmed Thajil said he was beaten in the alley as his friend was killed.

But the doctors were sceptical about the accusations against the Americans. "These men are liars and drunks; I see a lot of these cases," said Rebar Nouri, a Kurdish doctor.

We also had our doubts. To an untrained eye, their wounds did not look like those caused by the M-16, the US Army's standard rifle whose 5.56mm bullets are designed to tumble lethally inside the body. These men were shot by something smaller. As the bloodied men were wheeled inside, the hospital receptionist watched less in surprise than despair. Then he suddenly shouted: "Oh, Iraq!"

Yet Mohammed Tahab was shot by the Americans. His death is but a small episode in the horrors that have visited Iraq in the past two months but it tells a larger story about the American occupation and about the disaster that it is already becoming. It is not about heroes or villains, but the doomed intercourse between the occupied and the occupier.

Certainly, Haider Kassem - the man with the chest wounds - is no hero. According to Mohammed's mother-in-law, he is a drunken troublemaker who terrorises people by constantly firing his AK-47. She says the district neighbourhood wanted the Americans to sort him out.

And the American soldiers responsible for Mohammed's death and Haider's injuries were not murderers and thieves: they were soldiers who ventured under orders - but doubtless fearfully - into a dangerous and foreign place, which was only 300 metres from a US army base and in the centre of Baghdad, a city the Americans are supposed to have conquered with ease.

Mohammed Tahab lived in a neighbourhood known to the Americans as "the Slum". It is a heavily populated, rubbish-strewn warren of decrepit homes, open sewers and narrow alleys, some barely wide enough for two people to pass, known officially as the Rashid quarter in Baghdad's Old City. On the other side of Jamhuriya Street, a huge thoroughfare on which the Slum borders, stands the Amanat, the monolithic headquarters of Baghdad's municipal services, including water. Bravo Company 2/7 of the US Army's 3rd Mechanised Division has taken the compound over. The soldiers call their base "the Waterworks".

"This is the worst sector of the city," said Sergeant Harold English, mopping the sweat off his brow after returning from a day patrol last Friday.

Moments earlier, his men had arrived back at the Waterworks, a frightening-looking throng of well-armed soldiers with swaggers and sunglasses, several bawling "get outta the fucking way" at a small group of Iraqis gathered at the gate.

"I am surprised you are not wearing [body] armour," the sergeant continued. Most of the media in Baghdad stopped wearing flak jackets three weeks ago. "Every day we take rounds at this compound and every couple of days we engage in a firefight that results in loss of life," he said. By which he meant Iraqi life.

Having successfully taken Baghdad, Sgt English and his colleagues are engaged in a difficult transition. The US Army came to make war but is now under intense pressure from Washington to end the disorder in Baghdad, part of which can be blamed on the determination of Donald Rumsfeld, the US Secretary of Defence, to use small numbers of troops. According to well-placed British sources, the Americans had two divisions fewer than the number required to protect the city's main installations.

US officers tend to refer to their post-war opponents as criminals and to their new job as one of policing. In fact, the lawlessness has several components. There are the looters - many of them simply impoverished young men - who have swarmed across the city like locusts, systematically dismantling anything portable.

Some have evolved into gangs that shoot at each other; others are shot at by Iraqis trying to defend property. To this should be added some violent internal tribal feuds, racketeers and some post-Saddam score-settling. But the daily shooting at the American troops is less about crime than an attempt at politically-inspired armed resistance.

Captain James Dykes, a company commander based at the Waterworks, is in charge of patrolling a large chunk of the city that takes 20 minutes to drive from one end to the other. He says there are "200 hardcore bad men" on his patch who have "taken it into their tawdry little minds to hinder reconstruction".

The majority of Baghdad's residents, he says, want "jobs, security and economic security". On the night of Tuesday 13 March, some of the "bad guys" fired at the gates of the Waterworks. Capt Dykes called in a five-strong patrol of army Rangers led by an articulate young man called Lieutenant Stephen Gleason.

Lt Gleason describes what he calls the "get-down" tactics his men use. "We get them on the ground, face down, and warn them if they do not comply we will handle them with force. Some try to argue so we increase the force with [rifle] butt strokes to the head.

"Usually if you take them down and put the knee where the neck meets the back they figure out real quick that we are not to be fucked with." Lt Gleason and his colleagues slipped into the dark lanes of the Slum in the early hours of Wednesday, hoping to comply with Capt Dykes' request to find Iraqis who had been shooting at the Waterworks night after night.

They saw about eight men - including Mohammed Tahab and Haider Kassem - gathered outside under a striplight. By mistake, someone kicked a can, alerting the Iraqis.

"Two of them saw my point-man clearly," he said. "He told them to drop their weapons. One guy lifted his weapon up [to his shoulder]. We engaged with a shotgun - one round. Hit one guy in the face and neck, and the other in the abdomen. The other six did as they were told. One struggled so we hit him over the head with a helmet. He began bleeding quite a lot. The six men had no guns. The two wounded had an AK and a pistol each. One AK had only two rounds left in the magazine. The barrel was warm. The other AK was cocked and fully loaded and both pistols were cocked and loaded."

The Americans fired another shot into the front door of a house, which they searched for a weapon, but found nothing. The situation was becoming dangerous. "We allowed a woman to treat the wounded. A lot of women were screaming. We told them to get back into their houses. A lot of people were coming out onto their balconies. I decided we had to get out of there ... We told them that if ever they aim a weapon against an American soldier, they will be engaged."

Later the next day, Mohammed Tahab died. When we told the lieutenant last Friday, he said it broke his heart, "even though the guy was trying to kill us". Up to 30 Iraqis have been shot within the last month in the central area of Baghdad by American troops, according to the battalion commander, Lt-Col Scott Rutter. He insisted that the situation in Baghdad was improving, and that the majority of people welcomed the Americans and wanted nothing more than peace.

But these matters are never about the will of the majority. They are about an armed and determined minority, fuelled by the fury felt by the throng who buried Mohammed Tahab.