No, no, Thair Feely said, emphatically denying rumors that a five-star hotel was about to be built in the center of the Iraqi capital. "That is not true," said Feely, the chairman of the Iraqi Commission for Investment, shaking his head. He paused, his English crisp, drawing out the words for effect. "We are building a 71/2-star hotel!"

Feely left his broad cherry wood desk in his palatial office and walked over to a computer. He could show the pictures of what the hotel would look like, but he could not hand them over. After all, there were security issues to be considered in unveiling the 23-story hotel, which would be the first private investment in Iraq since the U.S.-led war in 2003 and the tallest building in the capital.

Plenty of foreign businesses promised new investment in the months that followed the war in spring 2003. Iraq was seen as a rich, consumer-driven land starved for goods and services after more than a decade of sanctions. Hungry investors packed seminars and conferences in the United States and Europe, eager to get in on the action.

But as the threat of violence increased, the reality of postwar Iraq sunk in. This was no businessman's picnic. Just getting into the country required a leap of faith -- forget about the funds -- that few investors were willing to take. And no laws yet exist that even allow foreign investment.

Feely thus has resorted to courting wealthy Iraqis. There are fewer cultural barriers to cross, he said, and frankly, Iraqi investors get that this won't be a "safe" bet for a while.

So, after 21/2 years of discussion, anticipation and prospecting, finally -- let it be said, finally, Feely acknowledged with a grin, Iraq's driver of investment had something to talk about. After all, the hotel was an important target.

The Iraqi government is donating the land but providing no other funds. The $85 million building is being financed privately by an Iraqi businessman whose identity Feely would not reveal for security reasons. It will take two years to build -- in the heart of the fortified Green Zone, plopped down in the middle of concrete barriers, foreign troops and a transitional government.

That was probably why the news of the new hotel, a fancy thing with plush carpets and king-size beds, according to the computer images, did not sit too well with the Iraqi public. The project, which the government announced by leaking to the Baghdad newspapers last month, was all the talk at the coffee houses.

Most ordinary folk in the capital cannot get inside the Green Zone and thus will not set foot inside the marble lobby anytime soon.

"This means it will serve only the foreign population and the government officials," said Ayad Ali Hussein, 56, the owner of the Gulf Hotel in the Battaween neighborhood of Baghdad. "We hope that similar hotels can be constructed inside Baghdad to serve the guests coming from outside the country. The government can encourage such construction either directly or indirectly through the banks. Many of us would be willing to be involved in such projects."

Saheb Abdul Sattar, 41, who owns an auto-parts store on Rabie Street, in western Baghdad, said he was upset that the government was donating the land and allowing the project at all, even if backed by a private investor.

"Who can go to the Green Zone to sleep in such a hotel?" Sattar said. "We want projects that serve the people. "

Most of the hotels in Baghdad are run-down and missing a few stars. Their biggest business in recent years has come from foreigners, primarily journalists and government contractors who pay inflated prices for dismally decorated rooms with masking tape stretched across glass windows to protect against bomb blasts. This is not a tourist haven.

Feely said three other major projects are close to being finalized. But he declined to discuss them, saying only that they were "committed, collateral, major."

"We're only doing investments in the safe areas," he said, outlining the broad strategy for attracting business to the country.

Azad Ahmad, 44, a professor of civil engineering at the University of Technology in Baghdad, was all for the construction of the new hotel even if, he said, "the fact that it is inside the Green Zone will restrict the number of people using it."

"Maybe the start of this project will trigger other similar projects serving the residents of Baghdad at large, not just a small group inside the Green Zone," he said. "I think it's magnificent."

Special correspondent K.I. Ibrahim contributed to this report.