World view - Lindsey Hilsum reports from Fallujah

If the US truly believes that the way to beat the insurgents is to destroy towns, much of central an

Iraqis say there are 200 mosques in Fallujah. Now the city of mosques lies in ruins. Anti-tank weapons have blasted holes in the azure painted minarets. Glass shards cover prayer mats; copies of the Koran lie abandoned in the mud and debris.

On Monday, I accompanied a unit of US marines and Iraqi Specialised Special Forces (ISSF) as they searched a mosque for weapons. The Iraqi soldiers unlaced and removed their combat boots before poking about in a perfunctory way. The ISSF are the elite of the new Iraqi military, working hand in hand with the Americans, but even they find it goes against the grain to search a mosque. The US marines reluctantly held back.

"I know the Iraqis don't want to find anything in the mosques," said the intelligence officer who led the raid. "We just have to make a judgement on whether to push them."

On this occasion they didn't, so the basement and several anterooms remained untouched. In the library, they found propaganda - maps of attacks on US forces, tracts glorifying suicide bombers, pictures of masked gunmen downloaded from the internet.

"This is the stuff that they've been posting on the mosques," said the intelligence officer, who read Arabic. "It's all about hatred." In other mosques, they say they found weapons stocks - Kalashnikovs, rocket-propelled grenades and ammunition.

Attacking a place of worship is a war crime, unless the other side is misusing it for combat. The marines are keen to show that it was the insurgents and not the marines who have been breaking the laws of war - hence the rapid Pentagon investigation into the alleged shooting of a wounded insurgent by a marine, captured on video by a team from the American TV network NBC. But the level of destruction in Fallujah must surely also be investigated, not just over whether it constitutes "disproportionate use of force" - another violation of the laws of war - but over whether it can possibly be effective in wiping out the insurgents of the Sunni triangle.

The town is destroyed. Embedded with the 3rd Battalion, 5th Marine Regiment, I sat in the back of an armoured vehicle as it pushed down walls, like a giant creature from a science fiction film, devastating everything in its path. Marines knocked down walls with hammers to clear lines of fire. When they couldn't push or bash their way into houses, they laid charges and blew their way in. Every car was treated as a potential booby-trap and detonated. Arms caches were not taken away to be destroyed but blown up on site, so the building in which they were found was also devastated.

Aerial bombs have reduced individual houses to rubble, which litters the streets. Bodies lie underneath. There are streets where every house has been hit by a mortar or a tank round.

The official line is that they needed to destroy the town to save it. Now "liberated" from terrorists, Fallujah can benefit from American largesse.

"Then the priority is rubble clearing," said a cheerful lieutenant. "The best thing is that we'll employ Iraqis to do it, so that will provide jobs. Then we'll restore electricity and water, and pay compensation for those whose houses have been damaged."

But it is not clear that financial compensation will make up for the loss of homes, memories and livelihoods. "This was a punishment for the people of Fallujah because they supported the insurgents," said an Iraqi translator who works with the marines. "They should blame the insurgents for bringing this on them, not the Americans."

Such harsh logic may not work. The Americans hope to install a new Iraqi authority in Fallujah, courtesy of the interim Iraqi government. But they will have to work with the same tribal leaders who did deals with the insurgents. The Americans now acknowledge that the main insurgent leaders - Abdullah al-Janabi, Omar Hadid and others - fled Fallujah long before the assault. The only way of stopping them from rising again is to have a secret police as brutal and feared as that of Saddam Hussein. The skills are there, but the will to support the US is unlikely to grow after people see the devastation of their town.

The American way is to destroy and start again, but Iraq has too much history for that to work. The rebels are in Ramadi, Baquba, Balad, Beiji, Mosul - in every town north of Baghdad. If the US truly believes that destroying a town is the way to win the counter-insurgency war, logically all these towns will have to be destroyed, and much of central and northern Iraq turned to rubble.

Protesting about the plan to invade Iraq, Colin Powell told George Bush that the "Pottery Barn rule" applied - if you break it, you own it. The Americans own Iraq, and they're breaking it, and every day it becomes more difficult to mend.

Lindsey Hilsum is international editor for Channel 4 News