BASRA, Iraq -- Sheikh Assad al-Basri says there's no need to worry that he and his Islamist militiamen might recreate a repressive Iranian-style theocracy in Iraq.

That's because the Islamic Republic of Iran is far too liberal, according to Basri, the leading local representative of rebel cleric Muqtada al-Sadr.

"Only 5 percent of Iranians abide by real Islamic laws," said Basri, who boasts that he and his cohorts already have blown up most of Basra's liquor stores, punished "decadent picnickers" and imposed Islamic dress codes on women. "The rest of Iranians are corrupt. Look, there are drugs and girls who don't wear hijab [covering] well in Iran."

Iraq's new Shiite-led national government vows it will respect and tolerate all of the country's religious and ethnic groups and will create a model democratic constitution for a region gripped by Islamic fervor.

But on the streets of this once-liberal port city -- which years ago featured a row of casinos and bars along its waterfront -- Islamist militias already have begun imposing a harsh version of Islamic law that has shocked many residents.

"They have managed to impose a republic of fear," said Yasser Qassim, a local journalist who publishes stories under a pen name out of fear for his safety.

Moderate Islamists -- which include Prime Minister Ibrahim al-Jafaari's Dawa Party -- won 37 of 41 local council seats during the Jan. 30 elections, with secular former Prime Minister Iyad Allawi's party getting only four.

Sadr's followers -- who rose up several times in armed uprisings against U.S. forces in several other cities last year -- didn't participate in the elections. But residents say they nevertheless have launched a reign of terror on Basra's streets, hunting down unveiled girls, attacking liquor stores and clamping down on the local press.

Basri claimed 12,000 local Sadr militiamen have been trained for combat and "are ready to mobilize in case of a crisis." Residents say they already are mobilized.

During celebrations commemorating the martyrdom of Shiite saint Imam Hussein, some 6,000 armed members of Sadr's Mahdi Army marched through the streets in a show of strength. Their influence and intimidation have arrived in all parts of this city of 1.5 million.

"They are everywhere," said Muhamad Nassir, a physician who heads Basra Maternity and Pediatric Hospital. "Some of them recently visited our hospital to try to convince us to forbid male doctors from curing female patients."

His colleagues from a nearby hospital -- renamed Sadr Hospital after the fall of Saddam Hussein's regime-- complained that Sadr's followers have hung posters of the young cleric inside the wards.

"They watch us," said one doctor, who requested anonymity to protect his safety. "I have received a few death threats. I am afraid to talk. To protect myself, I bought a pistol, which I hide under my shirt."

Basra officials concede the militiamen are creating problems, but they are hesitant to crack down.

"We are going through a sensitive time and we must be cautious and careful," said Muhamad Saadoun al-Ebaadi, the chief of the new provincial council and a member of a moderate Islamist group.

Fear is palpable on the streets. One day three months ago, a female student from Basra University's college of sciences was ordered to cover her hair. She refused to comply. Three days later she was found dead on the road to her house, said her classmates and professors.

Even picnics along the Shatt al-Arab waterway where the Tigris meets the Euphrates -- a treasured rite in steamy Basra -- have become an illicit act. In a high-profile incident first publicized by Iraqi television stations in Baghdad, Sadr's militiamen violently broke up a picnic last month attended by hundreds of engineering students beneath the palm trees of al-Andalus Park. As boys played volleyball and girls listened to music, men armed with knives, metal bars and assault rifles rushed them, firing shots into the air.

Students had obtained a permit for the picnic, an annual event. When police finally intervened, students said some assisted the militiamen.