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A Senate foreign relations panel took a hard line on Iraq reconstruction spending Thursday, demanding that the State Department show an improved return on its investments or risk losing project funds.

"I am not inclined to support any additional funding in this area without strong assurances that this sort of mismanagement has been weeded out," freshman Sen. Jim Webb, D-Va., told Ambassador David Satterfield, State's senior adviser on Iraq, at a hearing.

Webb cited idle contractors and overhead costs reaching more than half of total project costs, fraud and abuse investigations pending before inspectors general, and "blunders" by the State and Defense departments.

Satterfield testified that new reconstruction funding is slated to support, among other things, a jump in the number of provincial reconstruction teams in Iraq from the current 10 to 20, with nine of the new teams working in Baghdad and the northwestern Anbar province that the administration says has become a haven for Al Qaeda terrorists. As President Bush and Secretary of State Condoleezza Rice announced two weeks ago, the teams are intended to work on the kinds of local projects that can win the "hearts and minds" of Iraqi citizens.

In a strained exchange, Webb questioned Satterfield closely on how the administration will fulfill a pledge to work with Iraqi leaders of all parties and affiliations who "reject violence and pursue their agendas through peaceful, democratic means."

Webb said ongoing problems with poor-quality intelligence on the ground and a "fairly vague standard" for what constitutes peaceful means would allow the administration latitude in deciding which Iraqi leaders to work with.

Satterfield responded that State has "crisp" standards to measure whether a group operates peacefully. "The purpose of the expansion of the provincial reconstruction teams, [and] the additional pairing with the brigade commanders, is to enhance our abilities at a finer and finer level" to develop good information on the ground, he said.

"I think it's very clear who's engaged in violence," Satterfield said, promising to provide Webb with a copy of State's "measurable standards."

Satterfield testified that 300 new people would be added in the 10-team expansion. Their expertise will support projects including microloans, vocational education, grants, new business development, job creation and capacity-building in the first wave of expansion, with two later phases to add technical personnel such as irrigation specialists, agribusiness experts and veterinarians, he said.