The men, and a small number of women, are here for the Baghdad trade fair, attended by
               1,500 companies from 45 countries. They are all trying to compete for contracts worth
               billions of dollars to be negotiated by Saddam Hussein's regime, oiled by the 2.3 million
               barrels that Iraq pumps out every day.

               Outside the hotels, purring Mercedes and BMWs with the back windows curtained are
               waiting to sweep the international entrepreneurs along Baghdad's newly resurfaced
               boulevards, to the freshly restored restaurants on Al Massabah Street. But a chosen few
               will be taken elsewhere, to the private clubs where the real power in Iraq is brokered. They'll
               be going to the oak-panelled club rooms of the Hunter, the Alchandria, the Al Forocia – a
               riding establishment with an exclusive bar and restaurant, and the Al Zowariq, where the
               élite keep yachts and power boats on the Tigris.

               These are the clubs where Saddam's coterie go to unwind. Most of these proudly bear the
               name of their chairman, Uday Hussein, Saddam's son, on their letterheads. Uday is now in
               a wheelchair, crippled after being ambushed in the centre of Baghdad while driving his
               Porsche cabriolet.

               In these clubs, as bodyguards stand on discreet guard, the foreign visitors will be treated to
               local delicacies such as smoked fish from the Tigris, wines from the Lebanon and France,
               and 12-year-old Scotch. You can get almost anything in Baghdad and, compared to
               Western prices, most luxuries are remarkably cheap. A bottle of Scotch costs $6, an Yves
               St Laurent handbag will set you back $100, while the latest widescreen television sets go
               for about $400. The US may be the official enemy but the greenback is very welcome.

               You would scarcely know this is a city under sanctions. But Iraq is a society of parallel
               lives. Just a few miles from these well-stocked clubs and restaurants stands the children's
               hospital, where 13-year-old Marwan Ibrahim lies on a dirty bed, blood haemorrhaging from
               his nose and mouth. He has cancer. He will not get the bone marrow transplant he
               desperately needs if he is to survive. On the next bed, four-year-old Mariam Ayub is in the
               early stages of cancer. She is an exceptionally pretty girl, with a shy smile. Her mother,
               Adra, wants us to take a picture of her daughter so that she can remember her this way –
               before her looks change with the ravages of the disease and death claims her too.

               Marwan and Mariam are just two of the half-million Iraqi children who have contracted
               cancer since Saddam launched his disastrous invasion of Kuwait 10 years ago. In the war
               that followed in January 1991, the West used weapons coated with depleted uranium,
               which, it is claimed, contributed to the massive rise in cancer. After the war, sanctions
               imposed by the UN have blocked essential supplies of medicine and equipment that could
               have saved Marwan, Mariam and so many others.

               The British and US governments would have you believe that the people who cannot afford
               to eat or get ill in Iraq will, eventually, be driven by sanctions to overthrow Saddam. The
               average monthly salary of a doctor, which used to be about $1,000 (£670), is now between
               $3 and $5. It is much the same for other professions. Most professionals do two or even
               three jobs just to survive. Ali Daoud, a 51-year-old optometrist who qualified in Hamburg, is
               a taxi-driver in the evenings, plying his trade in a battered 10-year-old Nissan with
               cannibalised parts. He is hoping to get a job as a cleaner in one of the hotels, where a
               week's tips would bring him more than he currently earns in a month. Would he, and others
               like him, form an eventual opposition to Saddam?

               "No, no, I am not political," says Ali hurriedly. His friend Nasr, a fellow taxi-driver who once
               worked as a chemist, breaks in: "Listen, people are too tired with the effort of just living. We
               have had 10 years of sanctions. We are too tired, we have no energy left to protest about
               anything. The soldiers lack nothing, we are no match for them."

               Posters of Saddam are plastered all over the city. Fifty yards from where we are standing,
               another poster hangs outside the Palace of Justice: in this one, he stands holding scales in
               one hand and a sword in the other, swathed in judicial robes which look more like a
               dressing-gown. Nasr nods towards it, and makes a highly seditious throat-cutting motion.

               Since the middle classes had their wages devalued, most have sold everything to keep
               going. First went luxuries such as television sets and video recorders, then furniture and
               then their good clothes. Rahim al Sharifi, a teacher, is selling the last of the book collection
               he built up over 23 years. The dozen books include Time For a Tiger by Anthony Burgess,
               Great Expectations and The Pickwick Papers. "I love Dickens. I had most of his books,
               once," he says in a soft voice. "They were my private books, but I used to read them to my
               pupils at school. But no more. What a shame."

               The only computers officially allowed by the sanctions committee in New York are at least
               10 years old. Anything newer, it is declared, will help "Saddam's war machine". Of course,
               like everything else, modern computers are available in Baghdad. But they are smuggled in
               and affordable only to the rich. "In the poor schools we have got a shortage of everything,
               even pencils. They do not want us to have pencils because they say the military can use
               the lead. Can you believe it?" Mr Al Sharifi shakes his head. "How can you give children
               new ideas without books, pens, or pencils? How can you change anything, even about
               different forms of government, without education?"

               Lernik and Arpik Bedrosian, two sisters, run Mackenzie's, the oldest English-language
               bookshop in Baghdad. They are Armenian Christians – Christians now number 750,000 of
               Baghdad's population of two million. Lernik, a presenter on the local satellite TV channel,
               says: "We are now culturally isolated. No new books have been allowed in by the
               sanctions. By stopping the books they are also stopping Western culture and outside ideas
               coming in. What does the West hope to gain by this?"

               But if the poverty of ideas is spreading insidiouslythrough the isolated community, in the
               hospitals the effects of the embargo have been most immediately and visibly catastrophic.
               A range of drugs, from vaccinations to pain killers and even cleansing agents such as
               chlorine, are banned because they can be used for "dual purpose". George Robertson,
               when he was Defence Secretary, repeatedly declared that Saddam has $275m worth of
               medicine stockpiled in his warehouses that he refuses to distribute.

               I could not find anyone in Unicef, the World Health Organisation, or the relevant charities
               who would endorse these figures. Hans von Spaneck, the former UN humanitarian
               co-ordinator in Iraq, said the amount held in stock was about 12 per cent. Anupama Rao
               Singh, Unicef's senior representative in Iraq, said inspections show the figure to be between
               10 and 15 per cent – the standard minimum that should be held for emergencies. Even
               Scott Ritter, the UN arms inspector the Iraqis kicked out claiming he was a spy, told me in
               London that there was no evidence of medicine being stockpiled by the regime. "The
               sanctions", he said, "are pointless and self-defeating. They are not hurting Saddam, they
               are hurting the people of Iraq."

               Madeleine Albright has other views. When she was asked on television whether she thought
               the deaths of half a million children was a price worth paying, she said: "This is a very hard
               choice, but we think the price is worth it, yes."

               Britain has taken the lead in enforcing sanctions against Iraq. No British companies are
               known to have taken part in the Baghdad trade fair, and foreign minister Peter Hain talks
               about how dreadful all this fraternisation with Iraq is. But there are US companies keen to
               get their snouts in the Baghdad trough, camouflaging their involvement by dealing through
               European subsidiaries. One of the most prolific traders among these US firms is Halliburton,
               whose chief executive was Dick Cheney until he left to become George W Bush's running
               mate. Mr Cheney, of course, was secretary of state for defence during the Gulf War.

               "What we are seeing is the disintegration of a society," said Rao Singh, a UN official. "Iraq
               had invested heavily in social and health care and in 1989, before the war, 90 per cent of the
               people had access to clean water and 95 per cent had access to good health care. Iraq was
               in transition to reaching First World standards. The rate of child mortality was one of the
               best in the world. There has been a fourfold increase, and it is now one of the worst. In
               1990, an Iraqi child with dysentery had one chance in 600 of dying, now it is one in 50.
               These are statistics, but we are dealing with real lives."

               At the Children's Hospital, Dr Mohammed Firas lists the drugs he needs but cannot have. "I
               have not seen any improvements in supplies, none at all," he says. "It is upsetting when
               you see little boys and girls die in front of you and there is nothing you can do. We have a
               lot of relapses because of the shortages. We don't even have enough plastic sachets for
               blood. We see families go away thinking their children have been cured. But they come
               back. We all feel a bit hopeless."

               Marwan is one of those who had relapsed. He first contracted cancer six years ago. His
               mother points to his rapidly draining sachet of blood. "He needs sometimes 10 of them a
               day. But we can get only four. We know it is a matter of time. What can we do? We can
               only trust in God." And she strokes his arm and cries.