Not far from the Bekaa valley town of Baalbek - the Hizbullah stronghold where Western hostages from Lebanon's civil war were once rumored to be held - there is a large billboard praising American taxpayers.

Flanked by the flags of both countries, the sign is similar to countless others that stand in towns or near Bekaa areas that are often viewed by prominent Israeli and American analysts as a hot bed of "Islamic fundamentalist terrorism."

Yet these signs recognize "The People of the United States" and grants from the United States Agency for International Development (USAID) - funds that are reportedly being used to fight poverty by providing desperately needed infrastructure and income-generating mechanisms.

Behind the steel and concrete foundations of these projects, which include schools, irrigation networks and sewage treatment facilities, the aim is to bring warring communities together and build lasting institutions that encourage democracy and local governance.

At least that is the vision according to Fadi Riachi, the regional representative of Creative Associates International, a US-based firm that spent $7.8 million of USAID funds over five years to develop more than 100 projects affecting some 250,000 villagers in 92 villages.

"We try to get people to see there is another way for conducting public services ... there's another way for living and it doesn't have to be corrupt; it doesn't have to be technologically mediocre," said Riachi. "Some people say this is Lebanon, that you can't do it any other way. Well yes, you can. And here's the proof you can do it transparently, you can do it efficiently, you could do it economically and it could be technically excellent," he added.

Creative is one of several firms that have been contracted by USAID since 1997 in an effort to avoid channeling cash directly to the Lebanese government. The company has also been awarded substantial development contracts in Afghanistan and Jordan, not to mention a program to rebuild Iraq's education system that could total up to $157 million.

In Lebanon, Creative is best known for creating multi-religious decision-making bodies - the process behind developing projects such as potable water networks and fruit processing factories that force cooperation between thousands of disparate beneficiaries.

In the 22 Western Bekaa villages surrounding Deir al-Ahmar, Creative discovered a need for a refrigeration facility that would allow farmers from 14 different cooperatives to store their produce at affordable prices and drastically reduce operating and transportation costs.

The challenge was that each village wanted ownership over the facility, and the villagers refused to work together for sectarian reasons: "So we sat down with them and said 'I don't care if you are Shiite or Maronite, tall or short, woman or man, we're not going to do 14 cold storage facilities,'" said Riachi. "But if you form a union of co-ops, we commit that you will be able to store your produce the same time next year. Two weeks later, after 50 years of confessional and water-related conflicts, they came back with a union."

After three years and $300,000 spent, farmers report a 65 percent decrease in their cost of operations and exports of up to 80 tons of potatoes and onions per day. "We never had exports before," said Subhi al-Khoury, the facility's Maronite president.

Khoury paused to embrace his Shiite deputy Ahmed Jaffar, who said, "I used to have one village and now I have 22. Our concerns are the same, suffering and depravation."

Both men are highly skeptical of the central government and say the corrupt body is only useful for implementing multi-million dollar failures.

"What Creative has done with their seven or eight employees is more important than any project implemented in our area since we were ruled by the Ottoman empire," added Khoury.

Similar sentiments were voiced in the nearby town of Ain al-Nanana, where a 7 kilometer, $130,000 irrigation project has allowed six villages to double their arable land to 400,000 hectares.

"This was all drugs before," said farmer Degaule Habshi, who turned to point across his new hillside orchards on the mountainous fringe of the Western Bekaa. One of the advantages of growing hashish, he said, is that the crop requires little water. But with the new irrigation system, villagers are now planning to grow 12,000 new crops that would bring the community much closer to war time income levels.

But more importantly, Habshi said the project has brought some 200 families back to the region: "We feel free to cooperate with each other because there was no alternative - it would have taken a miracle before."

But Creative's projects are not done out of charity. Local communities are obliged to contribute at least 20 percent of a project's cost, whether in terms of human or material resources, and no cash is exchanged, which increases efficiency and productivity, according to Riachi.

In the case of building a 70,000 cubic meter hill lake in the town of Btedaai, the local contribution exceeded 50 percent. "We told the villagers, 'whatever amount you dig, we will finish it with polyethylene plastic coating.' Nobody's going to build a 200,000 cubic meter reservoir if they only need 70,000 cubic meters," he said.

Energizing poor farmers and encouraging teamwork is a simple formula, Riachi explained. "We put them in front of an economic choice: You can either provide your kids with enemies or with partners to work with."

However, it is unclear why the success of Creative's programs did not ensure a renewal of the organization's funding for a second round of USAID grants lasting to 2005.

Riachi said USAID had pursued a different strategy, while Raouf Youssef, the country director of USAID, said Creative was a "great organization," but was not competitive enough.