The head of the U.S. government's development program for Iraq, says projects are going ahead, and progress is being made, despite the insurgency and violence. That assessment comes amid growing concern about the sectarian violence of the past few days.

The spotlight in Iraq has been less on development and reconstruction than on the violence. That has been especially true after Wednesday's bombing of a major Shi'ite shrine in the city of Samarra and the subsequent sectarian violence that left over 200 people dead.

New tractors in Iraq

Dawn Liberi heads the U.S. Agency for International Development's programs in Iraq, and as she spoke with foreign journalists in Washington, she found herself first addressing the violence. "We extend our condolences to the families of three journalists, who were killed over the last two days, and frankly to all the people who were killed in this unfortunate incident related to the bombing of the mosque in Samarra," she said.

The U.S. government has allocated more than $20 billion for reconstruction and development in Iraq. Just over $5 billion of that is administered by U.S.A.I.D., and that is what Liberi had come to talk about.

She said, while defeating the insurgency remains the priority, reconstruction and development are also vital for Iraq's future.

Liberi said U.S.A.I.D. has been able to maintain its programs throughout the country, despite the violence, largely because local Iraqi organizations actually implement the various programs. "So, for the most part, we've actually been quite fortunate, in that our programs have been able to continue," she said.

She did note that security for both American and Iraqi personnel on the ground remains a major concern.

But, Liberi said there has been steady progress with programs in health and education, in helping to establish local governments and an independent media, and in improving and diversifying the economy. "The Iraqi economy is growing. It was about $27 (billion) to $28 billion last year. It's about $32 (billion) or $33 billion this year. Per capita income has, in fact, tripled over the past two-and-a-half years," she said.

Despite such improvement, U.S. officials have expressed concern over the latest sectarian violence. But President Bush said Friday he remained optimistic the Iraqi people will find a way to work together to resolve differences.

A report by the non-partisan International Crisis Group, or I.C.G., has issued a more dire warning. Speaking with VOA from his office in Amman, Jordan, the group's Middle East director, Joost Hiltermann said Iraq is in a very precarious situation. "I think it will require all effort on the part of Iraq's religious leadership, both Sunni and Shi'a, as well as the political leadership, as well as the U.S. government to find a course out of this very dangerous spiral and to reverse it," he said.

Hiltermann says Iraq could otherwise slide into outright civil war, and that, he says, would have grave consequences beyond the region.