Robert Fisk: Saddam is airbrushed out by the city that bore his name

The fresh black paint is everywhere. "Sadr City", it says, where once the name was "Saddam City". Outside the Aleppo Intermediate School for Girls, I actually come across a graffiti artist in action, painting over "Saddam" and again inserting "Sadr".

The Imam Bakr Sadr of Najaf was one of the first of Saddam's priestly victims. The governor of Najaf, I recall, leant towards me with special eagerness when I visited his city well over two decades ago. "Yes, we hanged him," he said with a smile. "And his sister." Legend has it – all too real, I fear – that they burnt off his beard with a cigarette lighter and hammered a nail into his eye before they hanged him.

So now this city of Shia Muslim hovels, of open sewers and burning rubbish, of piled-up loot – buses seem to be a speciality – this centre of opposition to the Baathist regime bears the murdered Imam's name and the hopes of all that he aspired to, not least an Islamic Republic. Thus is it newly painted on another wall: "Islam and al-Sadr do not accept looters."

And who should be a better spokesman for such worthy sentiments than the Sheikh Aref Jassim es-Saed, imam of the as-Sadjad mosque and keeper of what must be half of the loot stolen from chemists' shops across Baghdad. Indeed, most of his mosque is piled high with medicines and dentists' chairs and spitoons and stretchers and bandages.

"It is all to be given to the people, to be proportionately given back to hospitals who need it," Sheikh Aref informs me, watching me carefully over the top of his thin spectacles. "We are for stopping all this looting. We are making inventories and lists so that these things will be given back to the people of Baghdad."

There are black-turbaned divines in the yard of the mosque, fussing over sacks of Vietnamese baby milk and cartons labelled "Imported by the Republic of Iraq, Ministry of Trade, State Company for Foodstuffs". I knew where that came from. I watched the scavengers entering the Ministry of Trade four days ago.

Across Sadr City – as it must now be called – there are checkpoints and barrages and armed young men with thin beards. It's not exactly a Shia revolution, although some of the gunmen admit they are looking for "Wahabis", Sunni Muslims who they say have shot at them and who are in some cases "Arab volunteers" who came to Iraq to fight the Americans. Sheikh Aref says his supporters caught five, including an Afghan, a Syrian, a Saudi and a Moroccan. "But we are for all the people," he says. "We have Sunnis here with us. We eat the same food and pray together."

Exactly who does run Sadr City is a moot point. The gunmen appear to be loyal to their individual mosques and they are in no mood, yet, to take on the Americans. "We have security now in our area and we must have rebuilding and our people must have work," Sheikh Aref says. "The Americans say they came to free us and we are happy for that. But when will we have electricity back and water for our people? If the Americans want to help us, who don't they restore these things? America is a very powerful country and they can do what they want."

Sheikh Aref and his fellow imams are prepared to share the US desire to see the Arab "volunteers" expelled from Iraq. "America says it wants to fight terrorism – so do we. But do they really want to liberate us and free us? Well, the future will tell."

The slums of Sadr City are oral libraries of pain and torture. Just ask any man where Saddam's main underground torture centre was and he will tell you it was the complex at Baladiat or the Istiqbal centre beside Aqadmia.

Outside the Baladiat compound – it contained six entire residential blocks for its secret policemen and their families – two men plead for information. A brother and a father were taken there 20 years ago. Are they still there now?

Alas, only the Americans are now inside, complete with a spokesman who recites lectures on the connections between Saddam Hussein and "Palestinian terrorism".

He says he has found a photograph of Abu Abbas – the leader of the so-called Palestine Liberation Front, which handed out cash to all Palestinians killed by Israeli troops – shaking hands with an Iraqi Republican Guard officer and a Palestinian flag coloured red, white, black and green. And this was the American's proof. "Terrorism is terrorism," he announced. But weren't the Palestinians fighting an occupation army? "I wouldn't look to discuss that," he replied.

But the whole point is that the Shias of Sadr City support the Palestinians in their struggle against Israel, and while no one vouchsafes support for Iran – Sheikh Aref was educated in Baghdad and in the holy city of Najaf – most listen to the Arabic service of Iranian radio and realise how close Iran came to victory in its 1980-88 war against Iraq.

For the moment, however, Sadr City smiles at the West. "We want this democracy that you speak of," Sheikh Aref says. "Our definition of democracy? To give a person all the freedoms in all ways, on condition these are according to moral values."

Another religious man – not an imam but an electrical management worker – interrupts. "When you British came here, we had to make you go. Now the Americans have come, but we don't want them to stay here."