BAGHDAD, 15 April 2003 — Samir Ali Alou had a large knife and a mission: to help die-hard supporters of Saddam Hussein kill and terrorize Shiites, hoping to spark sectarian violence.

Alou is a citizen of Lebanon who said he came to Iraq for a jihad, or a holy war, against the Americans, though he was also offered $600 for his efforts.

He was captured by vigilantes on Saturday in Saddam City, the sprawling Shiite ghetto here; he was beaten and taken to a mosque where, according to his captors, he was tortured. Then he confessed.

“I made a mistake and I will try to correct my mistake for those people I was trying to harm,’’ he said while being held prisoner.

Alou’s arms were covered in bandages, but the crusty red wounds inflicted by his captors poked through the edges. His face was yellow with bruises and he had a scab on his nose.

“I didn’t know they didn’t like Saddam Hussein,’’ he said.

Alou’s story provides a cautionary tale to US planners hoping to stabilize Iraq and to overcome the deep sectarian hatreds that exist in a country where the Sunni Muslim minority ruled the Shiite majority for decades. Saddam’s regime has toppled, but he still has fanatical supporters here and they want to use car bombs and suicide attacks to destabilize the country.

Alou’s capture provides another cautionary tale, one that underscores the pressing need here for the creation of an interim authority. In the absence of any government, residents are taking matters into their own hands, with vigilante groups, like the one that captured Alou. The residents are growing accustomed to the idea of doing what they want, which will only make matters more complicated when the United States finally institutes its plan for administering Iraq.

Saddam City, as it was known up until the day Saddam fell from power, is a sprawling ghetto of concrete houses and wide avenues strewn with trash. In recent days, residents said there have been car bombings, sniper attacks and mortar attacks — many from foreign Arabs working on behalf of Saddam’s holdout allies. Residents now call it Sadr City, after Mohammed Sadr, a popular religious leader killed by the regime.

To help combat the violence, the residents of this neighborhood have resorted to their own violence, manning checkpoints to question anyone who looks foreign, and beating those they suspect are involved in plotting against them.

“We caught one Saudi, we tortured him and took out his teeth,’’ said Ali Saddam, 35, who was manning a citizen-staffed checkpoint on Sunday.

Ali Saddam and his neighbors stood in the middle of a busy street, beside obstacles they had placed in the road. They carried automatic weapons, which they used to flag down motorists.

They said the city comprises 79 administrative districts and that everyone of them now has its own citizen patrols.

The men boasted of capturing Palestinians, Syrians and Lebanese at roadblocks around the community. It’s easy to pick out foreigners in Saddam City because the way they dress and speak is different. The Iraqis said they are turning prisoners over to US forces after they are questioned.

“We have caught more than 60 ‘’ said Ali Saddam, who was dressed in a Miami Dolphins T-shirt. “They like to make divisions between Sunni and Shiite.’’

Alou didn’t set out to fight other Muslims. He said he came to battle Americans. He is from the Bekaa Valley, a poor, mostly Shiite region of Lebanon where he worked as a driver. He said that he arrived in Iraq in February and spent most of his time collecting intelligence for the Fedayeen Saddam, the radical militia which fought the US-led forces.

Alou was caught on Saturday when he slipped into the neighborhood on a spying mission for Fedayeen members who remain active in other areas of Baghdad.

“They wanted me to come here to know the houses of the Shiite militants, how they move, how they work,’’ Alou recalled. “First I asked about someone, they suspected me, then I was caught.’’ There are no functioning police or courts, so the neighborhood patrol grabbed him and then dragged him to the Sheikh Abdu Zahra Al-Budeiri Mosque. A few days ago, the mosque had a different name, in English it was called “Two Noble Men.’’ But it is now named after the Shiite religious leader who built the mosque before he disappeared after his arrest in 1999.

At first Alou denied he was involved in any wrongdoing. So they said they tied him up, beat and tortured him.

“They brought him yesterday morning and he was denying what he had done,’’ said Sheikh Ahmed Al-Budeiri, son of the slain leader. “Then after that he told the truth.’’

Al-Budeiri said that he is opposed to violence, but that in the case of these “terrorists’’ they have brought their fate on themselves.

As he spoke, a young man, no more than a teenager, slept on a foam mattress under the open sky. The man had been picked up by the vigilantes, and beaten, before they realized they made a mistake, that he was innocent.

But such mistakes don’t deter these men from wanting to run their own affairs after so long under Saddam’s iron fist. Religious and tribal leaders met on Saturday to draw up lists of workers. They hope to have their neighborhood up and running soon, and they are not interested in the efforts of the Marines, or any outside agency, to tell them what to do.

“We will see their intentions,’’ said Sheikh Ali Al-Tulai Bawi, of the Americans. “If they are in good faith they will bring democracy. If not, the people will deal with that in another way.’’