In a shift largely made necessary by the continuing violence in Iraq, U.S. officials in charge of reconstruction projects say they are now hiring Iraqi firms to do many of the jobs once performed by Western contractors.

It may have been the anti-Western insurgency in Iraq, which made U.S. officials here realize the capabilities and talent the Iraqis themselves could apply to the country's reconstruction efforts.

The program director for the U.S. government's Projects and Contracting Office in Baghdad, Robert Slockbower, says the violence, which has severely delayed rebuilding the country in the past year, has helped accelerate the recruitment of Iraqi firms to keep reconstruction efforts on track.

"When we started this reconstruction, we had the mind set that it was a permissive environment," he explained. "We also expected that there wasn't going to be much capability with Iraq itself to do reconstruction. As time has gone on, we have found out that there is a greater capacity of the Iraqi people and Iraqi firms to do work."

In 2003, Congress appropriated more than $18 billion to be used on Iraqi reconstruction projects. The original plan was to hire about a dozen major U.S. contractors to quickly rebuild Iraq's creaky infrastructure, and help the country move toward building a modern society. But those contractors and their employees soon became targets of insurgents in many parts of the country.

Last Wednesday, a company called Contrack International became the first major U.S. contractor to pull out of Iraq. The company was hired eight months ago to build new roads, bridges and transportation terminals in Iraq. But the company says it only managed to repair a handful of train depots, before the cost of providing security for its employees became too high to continue.

Rather than being frustrated by setbacks, Mr. Slockbower says, his office began working with the Iraqi interim government to find a solution. They agreed the answer to the problem was to award some of the reconstruction contracts to Iraqi companies, which face fewer security threats.

Mr. Slockbower says several projects, which have been initiated, such as road construction, have been extremely successful.

"We have done solicitations directly to Iraqi firms, hired Iraqi firms directly, and we have over 100 kilometers of village roads in construction in Iraq, right now," he said. "Just as the military has to have the versatility to be able to adapt to changing circumstances, I think, we have also been agile in addressing how we are going to move forward with reconstruction."

Not all U.S.-funded reconstruction jobs will be open to Iraqi firms for bidding. U.S. officials say the work on large, technically complex projects, such as rebuilding power plants and oil refineries, will continue to be done largely by Western contractors.

But the director of the Project and Contracting Office, Charles Hess, recently told reporters that, with more work going to Iraqi contractors, he expects the number of projects and reconstruction spending to increase substantially in the coming months.