BAGHDAD, Iraq (AP) - Oil from Iraq's southern fields began flowing through pipelines Wednesday for the first time since the war, and power at last was restored to parts of Baghdad. In the holy city of Karbala, thousands of Shiite Muslims demonstrated against the United States.

The south oil fields had been among the first installations secured when U.S. and British forces launched the ground war March 20. Coalition forces, aided by Iraqi oil workers, Wednesday fired up a gas-oil separation plant that sent oil to a pumping station and storage tank in Zubayr, outside the southern city of Basra.

''Our focus in restoring the oil is to give the biggest benefit to the Iraqi people,'' said Brig. Gen. Robert Crear, the top U.S. official charged with getting Iraq's oil production up and running.

In the holy cities of Karbala and Najaf, Wednesday was the climax of an emotional pilgrimage that has drawn an estimated 1 million Shiite Muslims. With Saddam Hussein's regime toppled, it was the first time since the 1970s that Iraq's Shiite majority could participate freely in the march to the cities' shrines.

Thousands of the pilgrims took part in an anti-American demonstration Wednesday. Among the banners were some that read, ''No to America, no to Israel, yes to Islam.''

American investigators were trying to figure out how hundreds of millions of U.S. dollars ended up in Iraq despite economic sanctions in place since 1990.

The latest stash - $112 million - was found by Army civil affairs soldiers inside seven dog kennels in a wealthy neighborhood where top regime officials once lived, the Los Angeles Times reported Wednesday. The Times and the New York Post said four soldiers were under investigation in the alleged theft of about $900,000 of a huge stash of dollars found earlier in the same neighborhood.

Some of the cash has been stumbled upon almost by accident, while the intensive nationwide search by U.S. teams for banned weapons of mass destruction has yet to turn up conclusive evidence of chemical or biological weapons.

Six Iraqi scientists working at Baghdad research institutions told The Associated Press they were ordered to destroy some bacteria and equipment and hide more in their homes before visits from U.N. weapons inspectors in the months leading up to the war.

All the scientists said they were involved in civilian research projects and all said they knew of no programs for weapons of mass destruction. It was not clear why their materials, ostensibly for nonmilitary research, were ordered destroyed.

Their accounts indicate the Saddam's regime may have had advance knowledge of at least some of the inspectors' visits, as the United States suspected, and that the regime was concerned about any material that could raise the suspicion of U.N. experts.

A grim legacy of Saddam's regime was being dug out of shallow graves on the grounds of Baghdad's Abu Ghraib prison, where several bodies have been found buried face down, hands bound behind their backs and gunshot wounds to the head.

''At least now we know they are dead, thanks be to God,'' said Saad al-Niami, an army colonel. ''Our families can get rest now.''

Saddam's secret services used the prison as a detention center, said Gen. Hossam Hussein, commander of guards there. He said it was built for 800 prisoners, but held 1,200.

Relatives said countless men were executed there during the final days of Saddam's teetering regime.

The mood was dramatically different in a lucky batch of Baghdad neighborhoods where power was restored for the first time in three weeks. Baghdad residents and the U.S. military have listed power as the capital's key need.

In Karbala and Najaf, huge throngs of Shiite pilgrims continued their observances. Some flailed their backs and inflicted cuts on their heads as they marched to the beat of drums.

Among the anti-American demonstrators was Khudayer Abbas Musawi, a 25-year-old engineering student.

''America came here not to free the Iraqi people but for oil,'' he said.