We perform variational studies of the interaction-localization problem to describe the interactioninduced renormalizations of the effective (screened) random potential seen by quasiparticles. Here we present results of careful finite-size scaling studies for the conductance of disordered Hubbard chains at half-filling and zero temperature. While our results indicate that quasiparticle wave functions remain exponentially localized even in the presence of moderate to strong repulsive interactions, we show that interactions produce a strong decrease of the characteristic conductance scale g * signaling the crossover to strong localization. This effect, which cannot be captured by a simple renormalization of the disorder strength, instead reflects a peculiar non-Gaussian form of the spatial correlations of the screened disordered potential, a hitherto neglected mechanism to dramatically reduce the impact of Anderson localization (interference) effects. These studies provided evidence that repulsive electron-electron interactions generally increase the conductance in small systems, with the suppression of electronic localization being tracked down to partial screening of the disorder potential. In principle, interactions could modify either the amplitude or the form of spatial correlations [6] of the renormalized disorder potential. The former mechanism is known to be significantly enhanced by strong correlation effects [9] and to survive even in high dimensions, while the latter is more pronounced [13] in the weak-coupling regime and in low dimensions [4].Despite this progress, several important questions remained unanswered: (1) What is the dominant physical mechanism for disorder screening, and can it qualitatively modify the noninteracting picture? (2) Can the interaction effects overcome Anderson localization and stabilize the metallic phase in low dimensions? The task to carefully and precisely answer these important questions in a model calculation is the the main goal of this Letter. To do this, we utilize two different variational methods to describe the statistics of the renormalized disorder potential in an idealized dirty Fermi liquid. In contrast to most previous attempts, here we perform a careful finite size scaling analysis of the conductance, which allows us to reach conclusive results for the transport properties of the model we consider.Model and method.-We study the paramagnetic phase of a disordered Hubbard modelwhere t is the hopping amplitude between nearestneighbor sites, c † iσ c iσ are the creation (annihilation) operators of an electron with spin σ = at site i, U is the on-site Hubbard repulsion, and n iσ = c † iσ c iσ . The spatially uncorrelated random site energies ε i are drawn from a uniform distribution of zero mean and width W . We work at half-filling, in units such that t = a = e 2 /h = 1, where a is the lattice spacing, h is Planck's constant, and e is the electron charge. To be able to carry out the large scale computations needed for conclusive finite-size scaling of the conduct...