It was supposed to be a proud day for the Iraqi military: a graduation ceremony for 978 Sunni recruits.
Watch Jon Berman's full report tonight on "World News Tonight."
They were the first group in years to join the army from Anbar Province, which is the hotbed of the Sunni insurgency.
An American colonel spoke at the ceremony and said he could tell his children he saw a group of soldiers "doing the right thing for their country."
But half of those Iraqi soldiers deserted -- immediately. They began taking off their uniforms when they learned they would not be stationed in their hometowns.
In an extraordinary and tense meeting, the generals tried to convince Fallujah's town leaders to get the AWOL soldiers back on the job.
Gen. Nasir Abadi, the deputy commander of the Iraqi army, said recruits must go where the army tells them they are stationed.
But Fallujah Mayor Sheikh Dhari Abdul Hadi refused and said the soldiers from Fallujah should join a Sunni brigade in the region.
The American generals were visibly frustrated, with Lt. Gen. Martin Dempsey saying, "in the strongest possible terms, I advise you not to ruin the one national institution you have."
The United States had high hopes for the Sunni recruits here in Anbar Province. Officials worry that without their participation, the Sunni population will resent the military.
"It is very, very important to include the people of al Anbar in this national entity, the Iraqi army," Lt. Gen. Peter Chiarelli said.
With sectarian tensions on the rise, U.S. military officials fear that dividing the Iraqi military would divide the nation and play into the insurgents' hands.