Ex-rebels now ministers as Iraqi Kurds enjoy power

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SARGALO, Iraq, Apr 18 (Reuters) Sher Mohammed smiles as he gestures to the rocky hill a few hundred metres away from the window of the mansion he calls ''Freedom Castle'' in the soaring mountains of Iraqi Kurdistan.

Not so long ago, he lived in a cramped and dirty cave on the other side of the hill, fighting Saddam Hussein's army and its chemical weapons.

''I am so lucky,'' says the 55-year-old former peshmerga guerrilla leader. ''In my dreams, I never thought the day would come when we could live in our own land.

''(The contrast) is between the earth and the sky. The difference is too much to explain.'' Sher Mohammed took his family to the safety of London for a decade, where he earned good money owning and running a Mongolian restaurant, and has returned to Iraq a rich and powerful man.

An aspiring politician and wine maker, he runs a contracting company in the Kurdish city of Sulaimaniya, 330 km north of Baghdad, and is the unofficial mayor or godfather for about 10 villages -- 15,000 people -- not far from the Iranian border.

Kurdistan's peshmergas -- ''those who are ready to die'' in Kurdish -- have fought rule from Baghdad in the dusty plains to the south for six decades and are now playing a major role in the autonomous province which leads Iraq in growth and security.

They head army units, run the police and the administration and even guard the borders with Turkey and Iran.

GUERRILLA ARMY Kurdish regional President Masoud Barzani led the guerrilla army his father founded and in which many of his ministers fought, including Kurdistan Deputy Prime Minister Omar Fatah.

Life for the peshmergas was harsh.

Fatah's wife, Kafia Sulaiman, who heads the Kurdistan Women's Union, was also a guerrilla and remembers the times fighting in the mountains as Saddam's army closed in after the end of the eight-year-war against Iran allowed it to shift its focus to the Kurds.

''We were like an island,'' she says, drawing on a cigarette in a plush restaurant in the hills above Sulaimaniya. ''We were surrounded. Our links with the main headquarters were cut off.'' More Reuters SHB GC0855

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