Wars, sanctions and looting had left Iraq's infrastructure in ruins before the post-conflict insurgency took hold.
Millions of dollars have been pledged and distributed to reconstruction projects across the country. But efforts have been hampered by insurgent attacks and funds diverted to meet rising security costs.
US officials say the total reconstruction bill is likely to spiral well above the $55bn estimated in 2003.
Electricity generation at best meets half of estimated demand and fell below pre-war levels at the end of 2006.
Most of the country lacks effective sanitation.
Iraq's Ministry of Water Resources says only 32% of the population has access to clean drinking water, and only 19% has access to a good sewage system.
Aid agencies say 60% of people in Anbar and Baghdad suburbs use river water.