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KHARNABAT, Iraq — More than 1,000 families have been displaced in Diyala province, mainly due to al-Qaida destroying homes or rigging them with explosives, according to the commander of Iraqi army ground forces.

Lt. Gen. Ali Ghaidan said the priority now is on reconstructing the province and building up its security forces.

"We still have a lot more stuff to do," he said Wednesday, adding that the Iraqi government recently gave the province $100 million for reconstruction projects.

Although rebuilding may be on his mind, Ghaidan’s troops, backed by U.S. military units, are still conducting offensive operations in the province.

Ghaidan said more than 700 suspects have been arrested in an Iraq-led offensive in Diyala province, more than half of the people on wanted lists.

He said he expects the operation to wrap up by the end of the month or beginning of September.

While Ghaidan told locals on Wednesday that the restive province is rid of insurgents, Americans had their doubts.

"What I came here to say is that all terrorists are gone in Diyala," Ghaidan told hundreds of residents who were gathered in the center of this Shiite town. "We have stopped them."

The bold, but premature, statement received an eruption of applause.

But the reason he made the announcement to Kharnabat villagers was unclear to U.S. military troops operating in the area.

"I think it’s contentious anywhere," said U.S. Army Capt. Charles Knoll, commander of Battery C, Fires Squadron, 2nd Stryker Cavalry Regiment.

Knoll believes the town of about 7,000 people is a safe haven for an underground Shiite militia. The village is also home to the former Diyala police chief, Maj. Gen. Ghanim Quraishi, who was fired last week for a lack of communication with the provincial council.

"Maybe he wanted to scare some people away," Knoll said of Ali’s remarks.

U.S. Marine Maj. Giles Walger commands a military transition team attached to an Iraqi army battalion in charge of clearing troubled spots along the Diyala River valley.

"They [Iraqi troops] are absolutely hunting al-Qaida, Iranian Special Groups, JAMs [Jaysh al Mahdi militia] and other targets of opportunity in the current operations," he said.

Walger, 36, of Baltimore, said that the Iraqi battalion detained 14 suspected insurgents on Wednesday alone. Insurgents may still be in Diyala but Walger thinks the high-value targets are not.

"I think the heads of the leadership are gone," he said.

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