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While the headlines are focused on gray financial skies, sunshine increases in Iraq.

BAGHDAD — Market by market, square by square, the walls are beginning to come down. The miles of hulking blast walls, ugly but effective, were installed as a central feature of the surge of American troops to stop neighbors from killing one another.

“They protected against car bombs and drive-by attacks,” said Adnan, 39, a vegetable seller in the once violent neighborhood of Dora, who argues that the walls now block the markets and the commerce that Baghdad needs to thrive. “Now it is safe.”

The slow dismantling of the concrete walls is the most visible sign of a fundamental change here in the Iraqi capital.

On Oct. 1, the Sunni-dominated Awakening movement, widely credited with helping restore order to neighborhoods that were among the most deadly, passed from the American to the Iraqi government payroll in Baghdad.

Haider Falah, an Awakening guard, shrugged off past clashes between those in Abu Saifeen and Fadhil. “We are all Iraqis,” he said.

Colonel Watson, the American commander in Dora, acknowledged that there was some risk of Awakening members returning to the insurgency or turning to criminal activity. But he said that every Awakening member’s fingerprints and retinal scans were on file, and his address and family were known both to the Americans and the Iraqi government.

“They are already identified by us and the National Police,” Colonel Watson said. “So that if they have any thought of going back to the insurgency it’s pretty difficult for them.”

Despite the Awakening’s wariness of its new masters, the government has come a long way in the last year. “The suspicion and worry is much, much less,” said Safa Hussein al-Shekh, deputy national security adviser.

No wonder nobody is talking about Iraq. The news is too good.