New Orleans Mayor Ray Nagin announced today that large parts of the flood-ravaged city will reopen over the next week and that 182,000 evacuated residents will be able to return to their homes and businesses, reversing earlier estimates that the metropolis could be closed for months.

"We're bringing New Orleans back," Nagin (D) said at a news conference. "It's a good day in New Orleans. The sun is shining."

The first section of the city could open as early as Monday, Nagin said, and the historic French Quarter of the city, the prime destination for tourists, could reopen Sept. 26. He said the French Quarter, which is on higher ground than many other parts of the city, was "high and dry" but that electricity lines needed to be double--and triple--checked so as not to risk fires breaking out in the historic buildings.

He said the buildings in the French Quarter were so close together that if a fire broke out, authorities needed to ensure that "we won't lose a significant amount of what we cherish in this city."

Authorities have cautioned, however, that even as some residents are allowed back, many portions of the city could remain uninhabited for months as tens of thousands of homes need to be drained or rebuilt.

Starting this weekend, Nagin said, "New Orleans will start to breathe again. We will have life, we will have commerce. We will have people getting into their normal mode of operations, and the rhythm that makes this city so unique."

The city will reopen one zip code at a time, depending on which section gets power and water utilities online, and how quickly hospital and emergency services can be restored. The first sections of the city to reopen involve portions of New Orleans that largely were unflooded: downtown, the French Quarter, Uptown and Algiers.

The first section to reopen to residents, Nagin said, will be Algiers on Monday, across the Mississippi River from the French Quarter. The city's Uptown section, which includes Tulane University and the Garden District, will be reopened in stages over the next week. The French Quarter will follow a week from Monday.

Nagin cautioned, however, that the water quality on the eastern bank of the city was still "not good to drink or bathe in." He said water quality on New Orleans' west bank was "excellent to good." He said sewer and trash removal would be functioning in the reopened areas when residents returned.

Nagin said the city's port and airport were open. He noted that three commercial flights landed yesterday at New Orleans airport.

"The city of New Orleans is back in business as relates to cargo and air traffic," he said.

Nagin also announced that the Pontchartrain Expressway, a main thoroughfare in and out of New Orleans, could re-open as early as Friday. At the moment, only one road in and out of the city is operational, he said.

"Our strategy is to re-populate the city in the safest areas first," Nagin said, "to get enough critical mass going so that the economics of the city starts to flow."

"Then simultaneously, we will be involved in . . . probably the biggest urban reconstruction project in the history" of the United States, he said.

Nagin said his "gut feeling" was that about 250,000 residents out of the some half-million that lived in New Orleans before Hurricane Katrina hit would be able to come back over the next three to six months.

He predicted that the city's population would end up exceeding the numbers of before because he envisioned a city "so incredible, so livable that everybody's going to want to come."

Less than half the city is now underwater, down from 80 percent at the peak of the flooding. Of the 144 pumps in Orleans Parish, 80 are working, up from 20 just days ago, according to William Lehman, the Federal Emergency Management Agency spokesman for Orleans Parish. About 50 percent of the phone lines are working, he said.

Even those streets in areas least affected by the storm are badly in need of cleanup. Stoplights do not work. Outside restaurants, the stench from two weeks' worth of rotten food is sometimes overpowering. Broken glass litters sidewalks and gutters. In some places, fallen brick walls block roadways.

Staff writer Peter Whoriskey in New Orleans contributed to this report.