Doing errands with his donkey, a former soldier in the Kurdish militia—the peshmerga, or "those who face death"—stops for a smoke and a chat with a member of a construction crew putting in a new road. Under UN supervision, several billion dollars of Iraq's oil revenues have been invested in the three Kurdish provinces in the north of the country during the last decade, feeding their residents, rebuilding villages smashed by Saddam Hussein, and bringing roads, electricity, and health clinics to rural areas.

Kurdish expatriates who have come back to their homeland since Saddam's fall are undoubtedly a force behind modernization. They arrive by the hundreds each month, carrying suitcases stuffed with euros, dollars, and pounds—along with foreign habits, attitudes, outlooks, and expertise they've acquired in exile.

Yet every government official and businessperson I spoke to was at a loss to specify the returnees' numbers or pinpoint where the bulk of the construction money might have come from. Its origins were too piecemeal for accurate monitoring, had monitoring of any kind been possible in cities without planning departments, maps, or population figures.

Nor in mid-2005 did northern Iraq have credit cards, banks, or conventional channels for major overseas investments. Until very recently, investors, like all other visitors, were obliged to take taxis across the dangerous Turkish or Iranian borders, the main entry points to Iraqi Kurdistan, with wads of cold cash in their baggage. The situation eased only slightly late last year, when Kurdistan Airlines was launched and introduced twice-weekly service between Erbil and Dubai, and a weekly flight to Frankfurt.

Parwen Babaker, the minister of industry for the eastern sector, was hard-pressed to specify any foreign manufacturing investments there, finally citing a British tobacco-products plant, capitalized at a scant 2.5 million dollars, and a small Italian-owned garment factory. "The gross domestic product of Kurdistan? I can't give you a figure for that," conceded Abdullah Abdulrahim, the region's deputy minister of economy and finance.

As for political institutions, their "facts on the ground" were as chaotic—and prolific—as the building boom. Depending on who did the counting, in 2005 Kurdistan answered to two, three, or four masters. There was the nominal central government in Baghdad, elected in a nationwide vote, endorsed by the U.S.-led occupation authorities—and all but impotent beyond the Iraqi capital and a few outlying cities. In Suleimaniya there was the bureaucracy formed by Jalal Talabani's Patriotic Union of Kurdistan (PUK), one of the two main Kurdish political coalitions. To the west, in Erbil, there was the parallel bureaucracy of veteran guerrilla leader Masoud Barzani's Kurdistan Democratic Party (KDP). And since June Erbil has also hosted the putative combined regional government of a united Iraqi Kurdistan, with Barzani as its president.

Evidence of just how divided the region is: It was impossible to make phone calls between the rival cities of Suleimaniya and Erbil, which are just 95 miles (153 kilometers) apart, and the shiny new post office in Suleimaniya processes letters only to and from addresses in its own province.

This bewildering situation has its roots not only in the Kurds' longstanding conflict with Arab Iraq, but also in fratricidal tensions among the Kurds themselves. As recently as the mid-1990s, the PUK and KDP fought a murderous internal war in which thousands were killed. It was fighting between Kurds, not with Saddam's army, that had sent the most recent wave of Kurdish refugees fleeing overseas, and pushed former Warriors like Majid Nadir firmly into the camp of the Builders.

One night when I joined him as he smoked a cigarette in the street outside his house, Majid vented his bitterness at the Warriors. "Look at the problems between the two parts of Kurdistan. Look at that shameful war they dragged us into. It's impossible not to ask, What have they done to move us forward?

"Personally, I've already suffered too much, thanks to them. What I want now is for my children to be happy. I want them to have a future."

Nowhere did the future seem shakier, however, than in Kirkuk, a city with no Builders at all. A city that its U.S.-appointed Kurdish mayor, Abdulrahman Mustafa, described as "basically in ruins, even though more than a million people live here."

History has taught the Kurds the importance of territory, and Kirkuk, they say, belongs to them. The city has been a focal point of Kurdish culture for centuries and today is the cornerstone of Kurdish dreams. Kirkuk is not simply the Kurds' Jerusalem: It is also their El Dorado, a staggering treasure trove that could make their dreams a reality. The nine-billion-barrel oil field already in operation is a 500-billion-dollar bank account for independence, and some experts believe that the northern reserves hold as much as 40 billion barrels. The problem is that the city lies outside the area now controlled by the Kurdistan Regional Government. It will require arms, the Warriors insisted, to secure it.

The Kurdish warlord of this shattered realm was General Rostam Hamid Rahim, known locally as Mam (Uncle). After the oil field incident and its death threats, most of our commutes to Kirkuk from the safety of the protected zone were in Rostam's SUV, with the general himself at the wheel, surrounded by machine-gun equipped pickup trucks full of peshmerga sharpshooters. Each trip was a graphic sortie into the Warrior ethos. But the most chilling insight came from a story that was meant to be faintly comic, related one evening by a friend of the Nadirs.

"Mam Rostam was critically wounded," she began, "and in the mid-1990s the peshmerga sent him to Germany, where we were refugees then, for treatment." He remained there for a year, past his convalescence, she went on, "and like all of us, he was required to fill out an employment form when he left the hospital."