NEW ORLEANS — Streetcars began running on the city's famed St. Charles line Tuesday for the first time since Hurricane Katrina knocked them out of service, but they aren't going far.

The Regional Transit Authority put two cars back on track for a 1.2-mile loop between Canal Street and Lee Circle. Before Katrina, 17 cars were in service on that line.

"This is a great day for the city of New Orleans. It just gives our citizens more comfort that the city is coming back bigger and better than ever," Mayor Ray Nagin said at a ceremony.

Officials hope to have the entire, roughly six-mile line running by the end of next year, although it is likely to take longer given the severity of the damage; Katrina shredded overhead power lines.

"For the people who live here, this is so much a part of everyday existence ... ," RTA board chairman Cesar Burgos said. "It gives us hope."

The line served about 3 million people a year before Katrina, Federal Transit Administrator Jim Simpson said.

Streetcars from the historic St. Charles line have been running on the Canal Street line. Katrina's floodwaters ruined the Canal cars. It will cost about $1 million each to repair the red Canal cars, transit spokeswoman Rosalind Cook said.

Nagin, members of the state's congressional delegation and other local officials were among those who took the first ride Tuesday.

Bob Phillips, a visitor from New York, said he was excited to take the $1.25 ride.

"The reincarnation of the car is another sign the city is coming back," he said.