BAGHDAD, Iraq -Baghdad's self-proclaimed rulers said Wednesday they will use Iraqigovernment funds to pay all state employees their salaries this month - with a 1,000-percentraise - and took credit for advances in getting power, water and hospitals back up and running.

They also claimed that the U.S. Army recognizes their authority, meets with them daily and even drove them from Kuwait to Baghdad on American military vehicles. The United States said it doesn't know who they are. 

Amid the power vacuum left by three decades of one-man dictatorship, it remained unclear who was running Iraq, or if anyone was at all. Jay Garner, a retired U.S. general, is charged with restoring services in Iraq while an interim government is formed.  But Mohammed Mohsen al-Zubaidi, an Iraqi exile, seemed to be getting ahead of those plans,consolidating his claim to Baghdad's governorship - and over the entire country, taking funds from national government coffers for his own embryonic administration. 

At a town-hall style meeting Wednesday, al-Zubaidi promised government employees that they would be paid on April 30, and that their salaries would be increased ten-fold. He said the funds would come from a Finance Ministry account at the Iraqi National Bank. 

"We ordered the finance committee to raise wages after hearing about the reserves we have,"he told an assembled crowd in an auditorium of the Sheraton Hotel. "We are raising salaries 10times, both civilian and military." 

Al-Zubaidi proclaimed that "the era of Saddam Hussein is over" and told Iraqis that their former government had abused them. 

"Saddam's policy for the Iraqi people was based on the idea that if you make your dog hungry,it will follow you," he said. 

In an interview with The Associated Press, al-Zubaidi's top deputy, Gen. Jawdat al-Obeidi, said the general manager of the Iraqi National Bank - as well as directors of other banks - were giving the self-proclaimed Baghdad government government funds deposited in theirinstitutions. 

"We don't have any legal government. It's just a local committee," he said. 

Al-Obeidi, a former Iraqi army general who for the last four years has run a limosine company in Portland, Oregon, said it wasn't only the banks that recognize his government, but the U.S. military as well. 

"We are working as a team with the Americans. We have a meeting with them every day," he said. 

He said his team met with U.S. Army civil affairs officers as well as military commanders, and that the meetings were held without news media present at U.S. insistence.  The U.S. government has consistently denied having any dealings with al-Zubaidi or his administration. 

Barbara Bodine, the U.S. coordinator for central Iraq, said Monday: "We don't really know much about him except that he's declared himself mayor. We don't recognize him." 

Brig. Gen. Vincent Brooks, deputy operations director for the U.S. Central Command in Qatar, said last week that al-Zubaidi was "an emerging leader and deserves some attention." But he said that "until full processes are in place ... that is not a recognized mayor of Baghdad." 

But whether real or imagined, al-Zubaidi's ties to Iraq's de-facto U.S. rulers appears to beserving him well. 

"Al-Zubaidi alone will not be able to do things for Iraq, but with the Americans he can," said Qassem al-Badri, a 40-year-old engineer attending al-Zubaidi's meeting Wednesday. Told the Americans don't recognize al-Zubaidi, he said: "I don't believe them." 

Dozens of Iraqi tribal chiefs, religious leaders and ordinary citizens crowded into an assembly hall to hear al-Zubaidi's opinions on Iraq's crisis Wednesday. Al-Zubaidi already acted as if he was Iraq's ruler, appealing for law and order and promising to solve problems. He bragged about the electricity, water and hospitals slowly coming backonline, although it was unclear what, if anything, he had to do with the progress. 

"I know you are suffering. I am one of you. I am not an American. I was born in Baghdad," he said. "You have been patient under a dictatorship for 35 years. Express yourselves! Be active! Love one another!" 

But in an indication of how difficult his job will be - if he manages to hold onto it - people gathered in the auditorium showed little unity. 

"All of us are suffering!" one man yelled. 

"We need everything - flour, electricity, gasoline!" screamed another. 

"My house is occupied by five people and they won't leave!" yelled a woman. 

One woman in a black chador stood and appealed to al-Zubaidi to help her with a different problem: 

"My TV is broken!" she called. "You are talking about sewage, water and electricity, but who will fix my television?"