(The reporter's name has been withheld for security reasons)
* Damascus residents relieved but remain fearful
* Anti-Assad rebels hope U.S. strike will still come
DAMASCUS, Sept 1 (Reuters) - Syrians reacted with a mixture of relief, disappointment and scorn to U.S. President Barack Obama's decision to seek Congressional approval before any strike on their country.
Some concluded an attack would never happen.
"I have to admit this morning was the first time I felt I could sleep in," said Nawal, a mother-of-five who works as a housekeeper in Damascus.
"I felt so relieved after hearing his speech. But I don't understand why he put us through all that suspense," she said.
Washington had seemed to be gearing up for a strike against President Bashar al-Assad's forces over an Aug. 21 poison gas attack that U.S. officials said had killed 1,429 people.
After U.S. Secretary of Defense Chuck Hagel said the military was "ready to go", and U.S. Secretary of State John Kerry called Assad "a thug and a murderer" whose forces had committed a "moral obscenity", many Syrians expected cruise missiles to rain down on Damascus by Saturday night.
Food prices soared, bread disappeared from bakeries and the streets of Damascus were deserted as people huddled around television screens beaming Obama's speech.
"THEY WANT US TO DIE"
Instead Obama delayed an imminent strike against Syria to seek Congressional support, a move that could take at least 10 days, if it comes at all.
State television in Syria, which has denied using chemical weapons, aired patriotic footage and music after the speech. Many Syrians were annoyed.
In Mouadamiya, a rebel-held Damascus suburb, Abu Akram, a doctor who treated poison gas victims and helped escort a team of U.N. investigators, found Obama's speech frustrating.
"For days we've been waiting. We were so hopeful. Now it's back to waiting and waiting. It turns out every leader in this world is a liar ... It's as if they want us to die," he said.
Obama's credibility has been called into question for not punishing Assad's government for earlier poison gas attacks, after the U.S. president had said use of chemical weapons would constitute a "red line" for the United States.
But Obama, seeking to extricate America from conflicts in Iraq and Afghanistan, has been reluctant to intervene in a civil war which has killed 100,000 people over the past 2-1/2 years.
Syrian state media described Obama's speech as the start of an "historic American defeat" while Assad said Syria was capable of confronting any external aggression.
Rebel fighters on the ground said they still hoped for a U.S. strike and understood Obama's decision to go to Congress.
"I thought the president spoke well and I believe he really wants a strike, and will get it from Congress," said Col. Qassim Qassim Saadeddine, a rebel commander and spokesman for the Supreme Military Council, the military wing of the Syria's leading opposition group abroad.
"I'm optimistic and I believe this is going to start causing the psychological collapse of the regime," he told Reuters.
The Syrian opposition coalition called on the U.S. Congress to support military intervention which it said should be accompanied by an effort to better arm rebels.
Nizar al-Haraki, the Syrian National Coalition's ambassador in Doha, mocked Obama's characterisation of chemical weapons being a "red line" that would change his calculus of the war.
"All the lines have been crossed, the red lines, the yellow lines, the purple lines and the world is still watching Syrians die everyday and doing nothing about it," he said in Doha.
BREAD RETURNS TO BAKERIES
By Sunday morning in Damascus, bread had returned to the bakeries and state security forces appeared relaxed, drinking tea and chatting at their posts outside government buildings
"We always knew there wouldn't be a strike. It's not going to happen. Anyway, we were never nervous about it. We were just worried for the civilians. But we're confident it's not going to happen," one of them said.
But Fatima, the housekeeper, was not as confident that the delay in American action would keep her out of danger. Death could come from Obama's strike or another chemical attack.
"I'm worried about another chemical attack, some sort of retaliation ... there's no end in sight," she said.
"Anyway, the hardest thing about death is waiting for it."
(Additional reporting by Erika Solomon in Beirut; Ismael Khader in Antakya, Turkey, Nick Tattersall in Istanbul and Amena Bakr in Doha; Writing by Yara Bayoumy; Editing by William Maclean and Jon Boyle)