NAJAF, IRAQ - The city's first airport is weeks away from opening, but already a bigger one is talked about. Land prices are soaring. Merchants say they don't remember business ever being so good.

Four years ago, Najaf was an urban battlefield, with American troops fighting Shiite militiamen loyal to cleric Muqtada al-Sadr. Today, the Shiite holy city is a hot spot of a different kind, thanks to improved security, a free-for-all market economy -- and a direct pipeline to the Shiite-led government.

The boomtown buzz in Najaf is more remarkable for its limited company. It's matched only in the northern cities of Sulaimaniyah and Irbil in the self-ruled Kurdish region in northern Iraq, which has been mostly a bystander in the war.

Now, Najaf may point to some of the same ambitions for wider autonomy by the most powerful Shiite party -- with possible far-reaching implications for the country.

The Supreme Islamic Iraqi Council hopes to maintain its domination of Najaf's local government in provincial elections expected late this year or early in 2009.

Its broader goal is a self-governing region in Iraq's Shiite south -- with its oil wealth and important religious shrines.

Shiite rivals oppose such a move, fearing it would cement the Supreme Council's sway over Shiite affairs. Sunni groups, meanwhile, argue that a Shiite autonomous region would fall under Iranian influence and lead to the eventual breakup of Iraq.

"We already are making every effort to win Najaf" in the provincial elections, said Ridha Jawad Taqi, a Supreme Council lawmaker. "We may well make it the capital of a future region."

It's already getting a major facelift -- even as plans to build new commercial towers and hotels in Baghdad remain little more than blueprints.

But in Najaf, the rumblings are real. Construction crews race to keep pace with millions of Shiite pilgrims -- some from as far away as India and Britain -- who visit the shrine of the revered Imam Ali or bury their dead in the massive "Valley of Peace" cemetery.

The city's ancient bazaar stays open until around 11 p.m., quite late for a market in most parts of Iraq these days due to security concerns. Shoppers fill narrow alleys to buy gold and silver jewelry, spices, worry beads and perfumes sold in small ornate bottles.

It's all a far cry from 2004. Then, the city's cemetery and old quarter were front lines between U.S. forces and al-Sadr's Mahdi Army militia until the city's Shiite clergy mediated a peace.

A dramatic improvement in security has persuaded more Iraqis -- as well as Shiites from abroad -- to travel to Najaf.

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