Black banners announcing the deaths of Mahdi Army fighters plaster the streets. Scores of Shiite militiamen gather at the funeral of a fallen comrade as a U.S. helicopter gunship hovers above.

The Baghdad district of Sadr City bears the scars of recent fighting, but those loyal to Muqtada al-Sadr are showing a renewed confidence after his Madhi Army militiamen rose up against an Iraqi government crackdown last week in the southern city of Basra.

Both sides claimed successes: Prime Minister Nouri al-Maliki says that Iraqi forces have broken control of Shiite gangs in Basra, and the supporters of the radical cleric al-Sadr boast that they humbled the government's plans to take full control of the city.

But in Sadr City - the main Baghdad stronghold for the Mahdi Army - there was little regard for the government assertions. Such bravado could lead al-Sadr and his backers to take even bolder steps to leverage concessions from Iraq's U.S.-backed leadership.

The fighting, which began in Basra but soon spread to Baghdad and elsewhere, ended when al-Sadr issued a statement Sunday calling his militiamen off the streets. He also demanded the freeing of security detainees not formally charged and a halt to the arrests of his supporters - two issues that led to the latest violence.

A top Mahdi Army commander, speaking on condition of anonymity because he feared reprisals from the government forces, claimed al-Sadr's forces interpret the outcome in their favor. But Iraqi forces also expanded their presence in Basra on Wednesday by moving into central districts and setting up checkpoints.

A U.S. military spokesman said that some Iraqi security forces weren't "up to the task" in the latest offensive against Shiite militias. Maj. Gen. Kevin Bergner said most of the Iraqi troops "performed their mission" but that the Iraqi government is investigating apparent weak links in the police and military.

Two days after al-Sadr's declaration, many stores in his Sadr City stronghold have reopened. Outdoor food markets were back in business. But traffic remained thin and outlying streets close to American forces were almost deserted.

Sadr City, home to some 2.5 million mostly impoverished Shiites, has been under an official driving ban for nearly a week.

Nevertheless, minibuses and private cars prowled the streets, ferrying people to and from Sadr City's main exit route, a large square where a massive portrait of al-Sadr's late father, Grand Ayatollah Mohammed Sadeq al-Sadr, dwarfs everything around it.

Vehicles steer clear of the Americans. Instead, residents walk past American and Iraqi checkpoints. Minibuses pick them up on the other side and take them elsewhere in the city.

Radios on many of the minibuses blared songs in praise of al-Sadr and his father. "I love al-Sadr because he heals my wounds. You cannot blame me for feeling like that," sang a male voice in one of the hymn-like songs.

The graffiti on the walls speak of the defiance of al-Sadr's followers.

"No, no to occupation," says one.

"We will never be humiliated," reads another.

More recent graffiti reflects some of the nuances of Shiite politics.

"This is Badr headquarters," is a phrase inscribed on many of Sadr City's green trash bins. It refers to the Mahdi Army's archenemy, the Badr Brigade militia of the Supreme Islamic Iraqi Council, a Shiite party that competes with the Sadrists for influence.

Al-Maliki, who returned to Baghdad on Tuesday after a week in Basra running his ill-fated security crackdown, is the subject of some of the more scathing graffiti.

"Down with al-Maliki," declares one. "Al-Maliki is treasonous," charges another.