In Northern Iraqi City, Al-Qaida Gathers Strength Al-Qaida's Iraq arm is gathering strength in the restive northern city of Mosul, ramping up its fundraising through gangland-style shakedowns and feeding off anti-government anger as it increasingly carries out attacks with impunity, according to residents and officials. It is a disturbing development for Iraq's third-largest city, one of the country's main gateways to Syria, as al-Qaida in Iraq makes a push to establish itself as a dominant force among the rebels fighting to topple the Syrian regime. The show of force comes as Mosul residents vote in local elections that have been marred by intimidation by militants, as in the past. Al-Qaida's muscle-flexing is evident in dollar terms too, with one Iraqi official estimating that militants are netting more than $1 million a month in the city through criminal business enterprises. Mosul and the surrounding countryside have emerged as major flashpoints in a wave of bloodshed that has killed nearly 2,000 Iraqis since the start of April - the country's deadliest outbreak of violence in five years. Gunbattles have broken out between militants and security forces, and several candidates have been assassinated. Just since the start of last week, attackers in and around the city have unleashed a rapid-fire wave of five car bombs, tried to assassinate the provincial governor and killed another local politician and four other people in a suicide bombing. Other Sunni militant groups, including Ansar al-Islam and the Army of the Men of the Naqshabandi Order, are also active in Ninevah. Mosul is the capital of the Sunni-dominated province. Al-Qaida's rise is particularly worrying because it is thought to be behind the bulk of the bombings across Iraq and because it is trying to assert itself as a player in neighboring Syria's civil war. The head of al-Qaida's Iraq arm last week defied the terror network's central command by insisting that his unit would continue to lay claim to al-Qaida operations in Syria, too. "We're definitely concerned about it," said a U.S. diplomat about the deteriorating security situation in Mosul. The diplomat, who wasn't authorized to speak on the record, said al-Qaida's Iraq arm sees an opportunity to try to build support in the area and is "out blowing things up to show that the government can't protect and serve the people." Voters in Ninevah and in neighboring Anbar province, another predominantly Sunni area bordering Syria, cast ballots for provincial council members Thursday. Iraqis elsewhere went to the polls in April, but the Baghdad government postponed voting in Ninevah and Anbar, citing security concerns. Al-Qaida's growing strength in Mosul is painfully clear to businessman Safwan al-Moussili. Traders like him say they are once again facing demands from militants to pay protection money or face grave consequences. Merchants say that practice had largely disappeared by the time American troops left in December 2011. They tell us: 'Pay this amount.' And if it's higher than before, they say something like: 'You recently went to China and you imported these materials and you made such and such profits,'" he said. It seems they know everything about us. Small-scale shop owners, goldsmiths, supermarkets, gas stations and pharmacies are all being hit up for money these days.