By Caroline Hawley
BBC News in Basra
This is an extremely sensitive time in Basra and the military is treading cautiously.
Basra police headquarters were badly damaged
British troops are trying to keep a low profile and are not conducting any patrols in the city because they don't want to inflame the situation.
There is relief that so far there has been no further unrest after Monday's dramatic events, when two British undercover soldiers had to be rescued after they were taken from a police station by militiamen.
However the army now has real concerns about the loyalty of some of the Iraqi security forces it is supposed to be working with and has been involved in training.
Officials have blamed "rogue elements" but it is not clear how big this rogue element is.
There is quite a lot of anger on the part of British troops about what happened here in Basra. One British official I spoke to said it had "beggared belief" that two British soldiers who were in police custody ended up in the hands of the militia.
The British military still won't reveal what the undercover soldiers were doing at the time but it says that under an agreement with the Iraqi government they should have been handed back to the coalition when they came into Iraqi custody.
The Iraqi government in Baghdad has promised to send a team from the Ministry of the Interior to Basra within the next day or two to start their investigations.
Initial findings should be know within two weeks.
Meanwhile British officials here are eager to point out that most of the police are not implicated in what happened and there is no suggestion that the entire Iraqi police force in Basra is turning against the British soldiers.
The military officials I have spoken to are stressing that the Iraqi police are still taking part in joint patrols.
They also said that over the weekend Iraqi police arrested two men and found weapons and explosives that could have been used against coalition forces.
Looking at the long term, the real concern for the British military and also for the Iraqi authorities is that the British have been training up the Iraqi forces and are relying on them to take over control of the country so that British troops can go home.
But after recent events, there is real concern that no-one knows how many members of the Iraqi police force are loyal, and how many are sympathetic to the militia.
The difficulty for the British military now, will be knowing friend from foe.