Some additional background on the Alternative Canon Universe:

-The History of Hi no Kuni (Fire Country) and Konohagakure (Village Hidden in the Leaves)

The various elemental nations grew up and evolved as separate civilizations for hundreds of years, warring with each other, raiding each other, and occasionally making alliance. About five hundred years before the beginning of the Naruto story, a far more advanced and technologically sophisticated empire came from over the ocean and took Hi no Kuni for it's territory, and used it to establish dominance over the other nations on the continent. This empire was known as the Tengoku, "Heavenly Empire", and some of their leaders actually took on the persona of gods to instill fear and obedience into the local population with their technology, such as iron weapons and crossbows.

Eventually, three people allowed the natives to repel the invaders after two hundred years of dominance-Uzu, a scholar and wandering sage on the run from the Tengoku for his anti-imperialistic writings, Uzu's adopted daughter Ren who was his student, and a general known as Iroh the Steel Dragon.

Iroh was native to Hi no Kuni, and was orphaned when he was a baby. The wife of the local Tengoku overlord, Yulia, was barren, and allegedly found the infant Iroh on the side of the road as her carriage passed by. She took him in and raised him as her son, and he became an accomplished and respected warrior.

But he did not find it moral to oppress the people of the Elemental Countries. He was taught by his mother to be merciful to his enemies, sparing the innocent. He was taught to respect life but also to know when to end it. His adoptive father, the overlord Hiro, had embraced his son but was cruel towards the natives, demanding more and more resources. Eventually, Iroh was told to kill Uzu, who had been stirring up rebellion in the local provinces with talk of freedom and pride.

Iroh met Uzu and Ren, and the old scholar convinced Iroh that his empire was corrupt and oppressive to the natives. Through the course of events, Iroh would join Uzu and his daughter and lead the people of Hi no Kuni in rebellion against the Tengoku, using relatively primitive chakra techniques to match their superior technology.

The Tengoku decided to cut their losses and abandoned the Elemental Countries, leaving thousands of their citizens behind. Many of them fled to the distant parts of the continent, others were killed by vengeful mobs and natives, and still others went native themselves and joined the free nation of Hi no Kuni.

Iroh, Uzu and Ren worked together to create a fair form of government for Hi no Kuni, and it emerged as a democratic nation, swfitly growing into the superpower of the continent. Their capital city was named Irohko, after the hero who had led their people to freedom. While their conventional armies advanced and were virtually unbeatable by the other nations, the secrets of what would become modern ninjutsu had spread and specialized warriors called ninja were being trained by the nations around Hi no Kuni for covert warfare. The democratically-elected leader of Hi no Kuni, the Daiten, saw that this was an area that Hi no Kuni could not fall behind in. He thus began to invite exiled and runaway ninja to his nation, free from persecution.

Among these immigrants were the Senju and Hyuuga clans, both escaping bloodline purges instituted by neighboring nations. The practice was to annihilate the majority of bloodline holders created by experimentation or mutation via chakra use, and take the survivors as breeders for the nations' militaries.

Hi no Kuni struck a radical deal with the Senju and Hyuuga clans that was almost as revolutionary as their democracy-Allowing the village of their Special Forces, their ninja, to become a semi-independent city-state. It would come to be called Konohagakure, and was founded over a century before the Kyuubi attack.

To this day, however, strain exists between the government of Hi no Kuni and Konohagakure. Konoha is essentially an independent, military dictatorship right in Hi no Kuni's borders. Making a mockery, some say, of Hi no Kuni's democratic ways. At least one political party in particular has had a grudge against Konohagakure since it's creation-The Nanashi Party, literally the "No-Names". Where several political parties in Irohko's government were formed from guilds and older families, the No-Names were formed from the common people of Hi no Kuni-Ronins, orphans, and the like. The Nanashi party gave the common people a voice in government and helped lead most of the other parties in the government to becoming pluralized as well. But in regards to Konoha, the Nanashi party will not compromise-It must be integrated into the Hi no Kuni military, just like the Ninja forces of other nations are.

The last time the Nanashi party held the majority and the executive section of the government, over forty years before the Kyuubi attack, they laid siege to Konoha, demanding that they integrate with their military or face destruction. That same night, the Nidaime Hokage and his top ninja appeared in the bedchambers of the Daiten and calmly asked him to reconsider his position on Konoha.

Since then, the Nanashi party has lost power, but over the last three decades they have been building towards retaking it, trying to get the support they need to get Konoha under their control.

Not that Konoha has been utterly blameless through it's dealings with the Hi no Kuni government. Uchiha Madara's attempted coup of Konoha was hidden from the Hi no Kuni government for ten years, as Madara's plans had included taking over the country-Considering the incident with the Nanashi party had occured only years before at the time, it was understandable. In recent years, however, certain members of Konoha's ruling elite have been hiding more and more of their actions from the eyes of their "hosts"-The fate of the Kyuubi no Youko and the true reasons for the Uchiha massacre being only the most serious instances.

So while the majority of Konoha's ninja forces are just as loyal to Hi no Kuni as they are to Konoha, and the majority of Hi no Kuni's population is positive about Konoha's continued status, the strain between the two is ever-present, and ever watched by those hoping to take advantage of the situation.

-Hi no Kyouwakoku no Rikugun (The Army of the Republic of Fire)

The Army of Fire Country (Or, it's official name, the Republic of Fire) is not the largest army on the Elemental Continent in terms of manpower, but it is the most powerful, the best trained, the best equipped and the most mobile. Working in concert with the Hi no Kyouwakoku no Kaigun, Navy of the Republic of Fire, it can deploy to any area of the Five Great Nations within a matter of days.

The Army is purely professional, maintained ever since it's inception more than three hundred years ago, with drafts instituted primarily to cover support roles. Chakra-using troops make up more than 50 percent of the army, all possessing at bare minimum enhanced speed, strength and agility. The officer corps, known as Samurai, have speed and strength approaching that of jounin ninja, though they lack the same versatility and ranged combat ability. The primary weapon of the officers is the sword, the enlisted using standardized spears, hammers, axes and other melee weapons.

Firearms have begun filtering into the Army, though these are generally restricted to sharpshooter companies and regiments-Modern firearms are still muzzle-loading, and while their accuracy has been greatly improved with chakra seal work, the long time between reloads is still a significant disadvantage. Added to the fact that a growing number of ninja are able to dodge bullets, and firearms are still restricted to specialized roles. The artillery of the Fire Army, for instance, is the best on the continent, chakra-enhanced accuracy and warheads allowing them to annihilate enemy fortifications with ease.

The critical weakness of the Army is, naturally, ninja. Ninja are far faster, stealthier, agile, versatile and adaptable than the regular Army troops, and are capable of annihilating a good sized regiment of Fire Army infantry without significant casualties. The Hi no Kuni attempted to remedy this with the Shugotenshi (Guardian Angel) section-A special anti-shinobi section of the Army-and while this section has remained part of the Armed Forces, it was still not a true solution to enemy ninja forces. While the Shugotenshi could deal with missing ninja of any rank, and is still employed for certain high-importance covert missions, Hi no Kuni learned through bitter experience that the only true counter on a strategic level to ninjas is ninjas, which is where the Ninja Forces come in.

The Army siezes and holds territory, assaults enemy fortifications, patrols the borders of Hi no Kuni, and defeats the armies of the enemies of Hi no Kuni. The ninja forces infiltrate enemy territory, gathering intelligence and destroying key targets in support of the Army of Hi no Kuni and provides additional covert support where needed. The Army is the Sword, Gun and Body-The Ninja Forces the Kunai, Poison, and Eyes of the Hi no Kuni Armed Forces.

-Ninja Abilities and Chakra

There have been two primary schools of thought concerning the use of chakra-To enhance what you can already do, and to do things you can't do. The school of the samurai is the former, the school of the ninja the latter. The Sage of the Six Paths is credited with the invention of ninjutsu over seven hundred years ago, but the truth is that chakra has been in use for even longer in subtle ways. Much of the usage close to the samurai school, with usage of it we would recognize as ninjutsu appearing just prior to the Tengoku occupation. It was the mustering of large armies that were chakra-capable that allowed Iroh and Uzu to eventually overthrow the Empire.

Iroh and Uzu developed chakra training on a crash-course basis with the assistance of dozens of brave volunteers, many of whom lost their lives. And while the understanding of chakra coils and the application of the energy has improved considerably over the past few centuries, the fundamental application for chakra for the conventional military has been enhancement, and enhancement alone.

Over the course of the 18-week Basic Training program, the average recruit for the Rikugun no Kyouwakoku no Hi will become twice as strong, twice as fast, twice as agile, and have double the stamina he or she started with. Training continues over the course of a soldier's career, those entering the Samurai (Officers) Corps increasing their abilities exponentially, and some even picking up ninjutsu-style tricks. Members of the Sharpshooters are trained to enhance their eyesight and other senses. The elite swordsmen develop their own unique moves and attack styles.

However, at it's core the conventional military is only enhancing what they can do. Which is, essentially, all they can do.

All human chakra coils undergo stages of development as a human develops, and usually become less and less malleable as time goes by.

Ninjas take advantage of a child's malleable chakra coils to train them to shape their chakra in different ways, contrary to the natural flow of their spiritual energy. It is this that allows ninja to apply their chakra in so many different ways.

Manipulating nature to produce effects for offensive and defense jutsu required intensive study over the centuries, but the effort was well worth it. Now ninjas can do everything from shoot fireballs out of their mouths at enemies, to entrapping them in hellish illusions from which they cannot escape, to summoning monsters to do battle, to making wood as hard as steel to dodging bullets and even bringing back the dead. Ninjutsu, genjutsu, taijutsu and fuuin jutsu have made the ninja the most powerful single warriors on the Elemental Continents save for perhaps only the most elite samurai, and even they lack the same versatility that ninja wield.

For these reasons do ninja begin their training at age 7 or below, and regular Hi no Kuni soldiers at ages 15-20. Teenaged chakra coils are mostly set by this age, but through short, intense training can be made to produce and channel much more chakra along established paths. Children's chakra coils can be made to stay malleable for the rest of the child's life, allowing them access to incredible abilities that some say echo those of kami.

However, many question the ethics of turning children into weapons and essentially not giving them a choice in the matter. It is one thing for a person considered an adult by society to join the military and choose to put their life in danger-Quite another to put a child into it. Just one of many issues the people of Konoha and Hi no Kuni have difficulty with-Even the people who run said programs.

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10-22-08: Edited and added some new information to reflect the continuing evolution of this idea.