Officials said the Bush administration plans to divert $3.46 billion from a fund for Iraqi reconstruction to improve security in the country.

They said the administration expects Congress to approve the allocation over the next few weeks.

In November 2003, Congress approved $18.4 billion for Iraqi reconstruction. But officials said that over the last few months, the administration has concluded that the projects could not be completed without adequate security,

Reconstruction projects have been stymied even in Baghdad, Middle East Newsline reported. Officials said the Iranian-backed Mahdi Army, led by Shi'ite cleric Muqtada Sadr, has intimidated more than 17,000 Iraqi employees from working on $160 million worth of projects in eastern Baghdad.

"If a place is not safe to build a sewer system, you can't spend the money," Secretary of State Colin Powell said.

Officials said $1 billion of the fund has been spent for Iraqi reconstruction. They said Shi'ite and Sunni insurgency attacks have prevented the United States and its allies from carrying out development projects in Iraq.

"Their random acts of violence have killed innumerable innocent Iraqi civilians and will not be tolerated," U.S. Army Col. Bryan Roberts, a spokesman for the 1st Cavalry Division, said.

Officials also cited the need to secure Iraqi elections in January 2005 for the decision to divert nearly 20 percent of the reconstruction fund. They said that despite the build-up of Iraq's military and security forces several cities remain out of central government control.

[On Monday, the Kuwaiti daily Al Rai Al Aam reported that two leading operatives of Abu Mussib Al Zarqawi were killed in U.S. attacks on Faluja on Sept. 17. They were identified as as Abu Mohammed the Lebanese and Abu Anas Al Shami.]

The U.S. military and Iraqi government have been drafting plans for the takeover of these cities by January. At the same time, officials were preparing for the prospect that such cities as Faluja, Ramadi and Samara would remain ungovernable by election day. One option discussed was that Baghdad would establish so-called safe zones for residents of insurgency-controlled cities to cast their ballots.

Officials said the new U.S. allocation would bolster all areas of Iraq's security forces. They said the $3.46 billion would be used to form 20 additional battalions of the Iraqi National Guard, with a current strength of 42 battalions.

The new funding would also be used to train and equip an additional 45,000 police officers, officials said. Under the U.S. plan, the Iraqi Border Patrol would also be bolstered in an effort to stop the flow of insurgents and weapons from Iran and Syria.

Officials said the United States has also sought to establish two additional Iraqi security agencies. One would serve as an anti-riot force and another unit would protect Iraqi dignitaries.

In another development, the Iraqi Cabinet has agreed to allocate additional funds for security operations. A statement by the office of Prime Minister Iyad Alawi said the government has also decided to build up a strategic food reserve meant to feed the country for three months.