* Iraq security official estimates 2,500 sleeper cell members in and near Baghdad
* Government, Shi'ite paramilitaries say they are rounding up cell members
* Sunnis fear intimidation
* ISIL says plans to seize whole capital, communicating with cells via Internet
* Plan may be to take Sunni districts, launch attacks
By Ned Parker and Oliver Holmes
BAGHDAD, July 3 (Reuters) - Iraqi insurgents are preparing for an assault on Baghdad, with sleeper cells planted inside the capital to rise up at "Zero Hour" and aid fighters pushing in from the outskirts, according to senior Iraqi and U.S. security officials.
Sunni fighters have seized wide swathes of the north and west of the country in a three week lightning advance and say they are bearing down on the capital, a city of 7 million people still scarred by the intense street fighting between its Sunni and Shi'ite neighbourhoods during U.S. occupation.
The government says it is rounding up members of sleeper cells to help safeguard the capital, and Shi'ite paramilitary groups say they are helping the authorities. Some Sunni residents say the crackdown is being used to intimidate them.
Iraqis speak of a "Zero Hour" as the moment a previously-prepared attack plan would start to unfold.
A high-level Iraqi security official estimated there were 1,500 sleeper cell members hibernating in western Baghdad and a further 1,000 in areas on the outskirts of the capital.
He said their goal was to penetrate the U.S.-made "Green Zone" - a fortified enclave of government buildings on the west bank of the Tigris - as a propaganda victory and then carve out enclaves in west Baghdad and in outlying areas.
"There are so many sleeper cells in Baghdad," the official said. "They will seize an area and won't let anyone take it back... In western Baghdad, they are ready and prepared."
A man who describes himself as a member of one such cell, originally from Anbar province, the mainly Sunni Western area that has been a heartland of the insurgency, said he has been working in Baghdad as a labourer while secretly coordinating intelligence for his group of Sunni fighters.
The attack on the capital will come soon, said the man, who asked to be called Abu Ahmed.
"We are ready. It can come any minute," he told Reuters during a meeting in a public place, glancing nervously around to see if anyone was watching.
"We will have some surprises," he said. He pulled his baseball cap down tight on his face and stopped speaking anytime a stranger approached.
A portly man in his mid-30s wearing a striped sports shirt, the man said he fought as part of an insurgent group called the 1920 Revolution Brigades during the U.S. occupation and was jailed by the Iraqi government from 2007-2009.
He gave up fighting in 2010, tired from war and relatively optimistic about the future. But last year, he took up arms again out of anger at a crackdown against Sunni protesters by the Shi'ite-led government, joining the Military Council, a loose federation of Sunni armed groups and tribal fighters that has since emerged as a full-fledged insurgent umbrella group.
While it was not possible to verify all details of his story, Reuters reporters are confident of his identity.
Like many Sunni fighters, Abu Ahmed is not a member of the al Qaeda offshoot once known as the Islamic State in Iraq and the Levant, and is ambivalent about the group which launched the latest uprising by seizing the main northern city Mosul on June 10 and shortened its name this week to the Islamic State.
Many Sunni armed groups turned against al Qaeda during the U.S. occupation but are now rallying to ISIL's rebellion against the Shi'ite led government, though some say they deplore ISIL's tactics of killing civilians and branding Shi'ites heretics.
Abu Ahmed said his own group, which includes former officers in Sunni dictator Saddam Hussein's disbanded army, supports some aims of ISIL. "There are some good members of ISIL and some bad," he said. Of the good ones: "We have the same cause."
The government says it can protect the capital and has spies who are tracking sleeper agents like Abu Ahmed to round them up.
"We have ample security plans. The sleeper cells are not only in Baghdad but in all other provinces and they are waiting for any chance to carry out attacks," said Lieutenant-General Qassim Atta, the prime minister's military spokesman.
"We keep those cells under careful and daily scrutiny and follow up. We have arrested some of them. We have dispatched intelligence members to follow up those cells closely and we have special plans to counter their activities."
An attempt to take Baghdad, a majority Shi'ite city with heavily fortified areas, would be a huge task for a rebellion that has so far concentrated on controlling Sunni areas. Many Baghdadis, Sunnis as well as Shi'ites, say they would fight an insurgency led by militants who want to establish a caliphate.
The Iraqi capital was the principle battlefield in Iraq's worst sectarian bloodletting from 2006-2007, with tens of thousands of people, mostly civilians, killed in fighting between Sunni insurgents, Shi'ite militias and U.S. troops.
Then, millions of people fled the capital and millions more fled homes within it, turning previously mixed neighbourhoods into fortresses dominated by one sect or the other.
Although it has been at least six years since warring Sunni insurgents and Shi'ite militia last held open sway over whole sections of Baghdad, the capital has remained vulnerable to infiltration by ISIL suicide bombers, who strike Shi'ite and government targets almost daily.
A senior U.S. intelligence official said Washington had evidence that ISIL was in the process of configuring its forces for a Baghdad assault using a plan that would include coordinated ISIL suicide strikes.
However, other U.S. officials believe ISIL could overextend itself were it to try to take all of Baghdad. They say the more likely scenario would be for fighters to seize a Sunni district and cause disruption with bomb attacks.
ISIL fighters insist that their plan is to take the capital and topple Baghdad's political elite.
"We will receive orders about Zero Hour," said Abu Sa'da, an ISIL fighter reached by telephone in Mosul. He said the group had cells in Baghdad and communicated with them by e-mail despite the government's sporadic blocking of Internet in an effort to disrupt the militants.
CAT AND MOUSE
For now, it is a cat and mouse game in the city. Abu Ahmed said the insurgency had agents in the Iraqi security forces, government ministries and inside the Green Zone. Men like him try to dodge an intensified campaign by the security forces and Shi'ite militias to round up conspirators.
There are "more detentions right now especially of ex-military officers and those who had been in American jails," he said. "Their houses are raided by special police and militias, then we never hear about them again. We check the jails, they are not there."
So far, they've managed to free 12 of them, at least one with the help of a 20,000 U.S. dollar bribe. He blames harsh treatment by the Iraqi government for forcing them to war, opening his shirt to reveal two dark scars on his chest he says came from interrogations in custody. There was no way to verify his allegations of abuse by the security forces.
The prospect of an assault on Baghdad has led Shi'ite paramilitaries, mainly underground since 2008, to mobilise this year to help the authorities fight ISIL. Asaib Ahl Al-Haq, a Shi'ite group Washington believes is funded and armed by Iran, says it has helped round up insurgent agents in Baghdad.
The movement says it is taking orders from the government and responding to a fatwa by Shi'ite clergy three weeks ago calling on citizens to help the armed forces.
The insurgents' "goal is to control Baghdad and also to forestall the political process in Baghdad. They will try to execute this plot with their sleeper cells," said Asaib Ahl al-Haq spokesman Ahmed al-Kinani. "We arrest them and hand them over to security forces."
Many Sunnis in Baghdad say such activity has brought back memories of the last decade's civil war, when Shi'ite militias and Sunni insurgents prowled the streets, capturing and killing the innocent under the excuse of rooting out terrorist foes. Now people are disappearing again.
A Sunni woman who spoke on condition of anonymity because she feared retribution from Asaib Ahl al-Haq, said her brother was first held by police for 13 days in April. Eight hours after he was released, masked Asaib fighters stormed into their house and took him.
"Their faces were covered. They had no number plates on their cars," she said. That was the last time she saw him. (Additional reporting by Mark Hosenball in Washington; Editing by Peter Graff)