Pro-American Iraqi politician Ahmad Chalabi returned to the capital Baghdad on Wednesday on his first visit to the city since the overthrow of the monarchy in 1958, an adviser said.

"Our plans are to establish ourselves here, to set up an office and begin the work toward reconstructing democracy and civil society in Iraq ," said Zaab Sethna, who traveled with Chalabi in the motorcade from the southern town of Nassiriya.

"His first plan is to go see his old home and then start building democracy in Iraq," added Sethna, speaking by satellite telephone.

Chalabi, leader of the Iraqi National Congress, was the first major exile politician to reach Baghdad since the collapse of the government of Saddam Hussein last week.

Sethna said Chalabi would soon start meeting Iraqis including community leaders, religious leaders and businessmen.

He said Chalabi would coordinate his activities with Jay Garner, the retired U.S. general leading the drive to rebuild Iraq, and the U.S. authorities.

Asked how long Chalabi would stay in Iraq, Sethna said: "What he has said is 'I have come home to stay'."

An INC statement issued in London said Chalabi and the leaders of four other political groups would meet in Baghdad as soon as practical as the Iraqi Leadership Council.

The council of five, which could be expanded to include Iraqis who lived under Saddam, is relatively independent of the United States and includes the main Shi'ite Muslim group, which refuses to cooperate with U.S. invasion forces.

An INC source said the Baghdad meeting would be complementary to the consultation process which began in Nassiriya on Tuesday under U.S. chairmanship.

But a major difference is the participation of the Shi'ite Supreme Council for the Islamic Revolution in Iraq (SCIRI), which appears to have a wide following in the Shi'ite south.

NOT A CANDIDATE

The members are Chalabi, SCIRI representative Abdelaziz Hakim, Ayad Allawi of the Iraqi National Accord and the heads of two Kurdish groups -- Massoud Barzani and Jalal Talabani.

The U.S. military flew Chalabi to Nassiriya 10 days ago, giving him a head start over other exiles trying to establish a power base among the Shi'ite population of the south after years of Baathist repression under Saddam.

But asked if he intended to play a political role in Iraq, he was quoted as telling French daily Le Monde earlier this week: "Absolutely not. I am not a candidate for any post."

Chalabi was brought up in the house which is now the Indian embassy in the north Baghdad district of Aadhamiya. After leaving Iraq in 1958 he has lived abroad, mostly in Lebanon, Jordan and Britain.

Sethna said Chalabi had no immediate plans to reclaim the building, which was appropriated by the government after the 1958 revolution. "Many Iraqis will make property claims and there has to be an orderly process," he added.

The INC said Chalabi, a Shi'ite from a prominent family, received a warm welcome in Nassiriya. But other reports suggest that SCIRI, which is close to Iran and wary of the United States, may have a broader following among the southerners.

When the United States held the Nassiriya meeting to work out how Iraq should be ruled, thousands of Shi'ites marched through the town chanting "No to America, No to Saddam."

INC officials have said Iran has allowed Iraqis in exile to cross the border from the east with weapons to take control of areas where U.S. forces are thin on the ground.

Abdelaziz Hakim, who is deputy head of SCIRI, ended 23 years in exile in Iran and went to the southeastern town of Kut on Wednesday to a rapturous welcome, his son said.

Analysts say the political future of Iraq depends to a large extent on the battle for the hearts and minds of the Shi'ites, who make up more than half of the population.

Around 120 Iraqi exile fighters from Chalabi's group, trained by U.S. special forces and armed with AK-47s, drove into Baghdad on Wednesday to a low-key welcome.

The U.S. military flew some 700 of the Free Iraqi Forces fighters to Nassiriya with Chalabi on April 6 and INC official Nabil Moussawi said some have also deployed in Mosul, where the INC is trying to restore law and order with U.S. forces.

PHOTO CAPTION

Iraqi politician Ahmad Chalabi left the southern town of Nassiriya April 16, 2003 for the capital Baghdad, a senior aide said. Chalabi is seen during a December 9 interview in Tehran. (Caren Firouz/Reuters)