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 hover menacingly above.

The Baghdad district of Sadr City bears the scars of recent fighting, but men loyal to Muqtada al-Sadr are confident they have already won.

“We did not really throw everything we have into battle. We only fought in self defense,” said a top Mahdi Army commander who spoke on condition of anonymity because he feared reprisals. “If (Prime Minister Nouri) al-Maliki has won, he would have dictated his demands. But it’s we who did that,” said the 37-year-old commander.

Such talk, echoed by many in Sadr City, mirrors the confidence of al-Sadr loyalists after a week of fighting between Mahdi Army fighters and U.S.-backed Iraqi forces.

The fighting, which began in the southern port of 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.

Al-Maliki, humbled by the strong resistance his forces met, has declared the operation a “success.” But there was no doubt in Sadr City on Tuesday who won.

A video clip taken by a mobile phone that purports to show a U.S. Stryker vehicle crippled by a roadside bomb and engulfed in flames is making the rounds in the area, jubilantly sent from cell phone to cell phone as proof of victory.

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.