Ahmad Chalabi, the former exiled leader who has veered between hero and villain both in the United States and Iraq, is back in power.

Last year Chalabi, long the sweetheart of Bush administration neoconservatives, was charged with counterfeiting in Iraq, was wanted for embezzlement in Jordan and was accused by US intelligence officials of spying for Iran.

His arch rival, Ayad Allawi, became interim prime minister last May. Paul Bremer, then effectively the US governor of Iraq, sent armed Americans to back an ignominious Iraqi police raid on Chalabi's home and offices that same month. Chalabi had to flee the country.

Now, Allawi and Bremer are gone. Chalabi is a deputy prime minister and, a man once convicted of financial corruption, he now has tremendous power over Iraq's finances, in part because his nephew is finance minister and an ally, Ibram Bahr al-Uloum, is minister of oil.

All charges against Chalabi in Iraq have been dropped. He is negotiating a settlement of his 1992 embezzlement conviction in Jordan by paying millions of dollars in restitution to defrauded bank account holders.

He also seems to have regained acceptance at the highest levels of the US government. In recent days, both Vice President Dick Cheney and Secretary of State Condoleezza Rice have reached out to Chalabi for help in quieting the rising violence in Iraq, according to Richard Perle, a former top Pentagon adviser who is close to Cheney and Chalabi.

Chalabi's resurrection has confounded his critics and cheered his admirers. But even his critics admire his intelligence and political agility.

``He's twice as smart as most people and works very hard and knows how to manipulate people,'' said David Mack, formerly the No2 Middle East official in the State Department.

``He is very good. Ahmad is not to be underestimated.''

Chalabi's latest rise to power was accomplished despite having almost no political base and, according to the polls, being at times the least popular of Iraqi leaders.

How did he do it?

Some say the seeds of his regrowth were sown in January 2004 when, still in the good graces of the United States, he surprised Iraq observers by coming out against a US plan for quick elections that was opposed by Ayatollah Ali al-Sistani.

Chalabi, a secular Shiite, seemed an odd partner for Iraq's senior Shiite cleric at a time when the role of religion in the new Iraq was the central debate. But late last year, Chalabi and a number of his supporters appeared on a Sistani-backed list of candidates for parliament, alongside some of the most religiously conservative Shiites in Iraq.

Because Iraqis voted only once - for a slate of candidates rather than individuals - Chalabi was elected despite his unpopularity.

Amatzia Baram, an Israeli expert on Iraq, says one reason he has succeeded so far is that Iraq's political neophytes cannot operate without him, particularly as they prepare to draft a new constitution.

``He is the only politician in Iraq who really knows the ins and outs of backroom horse-trading and nego-tiations,'' Baram said. ``He is so adept at this kind of negotiating power positions. They really need him.''

Another reason for his success may be that he is very close to Iran, where most of Iraq's new Shiite leaders lived in exile. ``Just before the war he went to Teheran, and they really gave him the red-carpet treatment as a future leader of Iraq,'' Baram said. Also cited by some experts is Chalabi's zealous desire to rid the government of former members of Saddam Hussein's mostly Sunni Baath Party.

But that has become a problem for the US, which is concerned about further alienating moderate Sunnis and driving them into the insurgents' arms.

The loss of US support may have helped legitimize Chalabi in the eyes of Iraqi Shiite leaders, and his lack of a popular following may have made him seem less a threat to them, according to one administration official who has not been won over.

``Soon, he may be indispensable,'' said the official.

Perle said Chalabi's problems with the United States are the result of a campaign of vilification and misinformation waged against him by the CIA, which he said had a longstanding grudge over a failed coup it backed that Chalabi had warned it about.

Now the tide is changing, Perle said. Charges that Chalabi passed information to Iran are still being invest-igated by the FBI, sources said.

``I think some people [in the administration] who accepted what was being said about him now have very serious doubts about that,'' Perle said.

Despite Chalabi's alliance with religious hard-liners, Perle said he still has complete faith in his friend. ``Is this a man who believes in secular democracy? The answer is yes, a thousand times, yes,'' Perle said.