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FALLUJAH, Iraq (AP) -- U.S. forces Friday said they had retaken most of a key southern city from a rebellious Shiite militia, and an American-declared halt to fighting in the embattled city of Fallujah was undercut by bursts of gunfire on the first anniversary of the fall of Baghdad.
On the western edge of Baghdad insurgents hit a fuel convoy, killing one U.S. soldier and an Iraqi driver the military reported.
A Baghdad correspondent for the Arab satellite broadcaster Al-Jazeera said the convoy had been carrying fuel near Al-Amiriyah and that not fewer than nine people were killed in the attack. The report said none of the dead had been identified.
A second soldier was killed in an attack using roadside bombs and small arms at Camp Cook, a U.S. base in northern Baghdad, the military said.
The deaths brought the toll of U.S. troops killed across Iraq this week to 42. The fighting also has killed more than 460 Iraqis -- including more than 280 in Fallujah, a hospital official said. At least 643 U.S. soldiers have died in Iraq since the war began in March 2003.
Iraq's top U.S. administrator, L. Paul Bremer, announced a unilateral pause in the 5-day-old Fallujah operation to allow Sunni clerics and American military leaders an opportunity to talk with anti-coalition insurgents.
It also was designed to allow in humanitarian aid and let beleaguered residents bury their dead. Cars filled with women, children and the elderly streamed out of the city, a bastion of anti-U.S. Sunni guerrillas 35 miles west of Baghdad.
The violence that has intensified and spread throughout Iraq this week has created a degree of cooperation between anti-American elements in both the Sunni and Shiite Muslim communities, which have been deeply at odds for decades.
U.S. troops drove into Kut before dawn Friday, pushing out members of the militia headed by radical Shiite cleric Muqtada al-Sadr that had seized the southern textile and farming center this week after Ukrainian troops abandoned the city under heavy attack.
A U.S. helicopter struck al-Sadr's main office in Kut, killing two people, witnesses said. Americans were patrolling the streets during daylight hours.
Brig. Gen. Mark Kimmitt said he expected the operation to retake Kut from al-Sadr's al-Mahdi Army militia would be finished by Saturday morning.
"We are fairly comfortable that the town of al-Kut is well on its way to coming back under coalition control," he said.
Kimmitt told CNN he believed there were 300-400 al-Sadr militants in Kut on Thursday night who had been trying "to intimidate the people" in the city of about 250,000.
The Kut operation represented a major foray by the American military in a region where U.S. allies have struggled to deal with the uprising.
The siege on Fallujah, however, brought a condemnation from one of the most pro-American members of the U.S.-picked Governing Council, Adnan Pachachi.
"These operations were a mass punishment for the people of Fallujah," Pachachi told Al-Arabiya TV. "It was not right to punish all the people of Fallujah and we consider these operations by the Americans unacceptable and illegal."
The heavy fighting for Fallujah was prompted by the March 31 slaying of four U.S. civilians in the city. Their burned bodies were mutilated and dragged through the streets by a mob that hung two of them from a bridge.
The Marines called a halt to offensive operations in Fallujah at noon Friday. Only 90 minutes later, Lt. Col. Brennan Byrne, commander of the 1st Battalion 5th Marine Regiment, said he had permission to resume offensive operations.
For hours afterward, there was sporadic shooting in the city that for some Iraqis has become a symbol of defiance. Marines were hunkered down around the city and in an industrial zone just inside, without entering residential neighborhoods. Before the halt was called, there was fighting around a mosque that was the center of battles for three days.
A year to the day after Marines toppled Saddam Hussein's statue in Firdos Square, a poster of al-Sadr was attached Friday to an unfinished bronze monument at the site. U.S. soldiers climbed up and tore it down.
The felling of Saddam's statue before a cheering crowd of Iraqis on April 9 was an enduring image of Iraq's liberation.
But on Friday, Baghdad was tense, and a curfew was imposed in Firdos Square, where at least two armored vehicles were parked. At the western entrance to the capital, gunmen freely roamed the main highway, and a burned tanker truck sent a huge pall of smoke over the city.
In the afternoon, a mortar round hit a small building near the square. No injuries were reported in the attack, which shook two nearby hotels that are home to many foreigners.
British Foreign Secretary Jack Straw said that a year ago, he had not imagined Iraq would be in its current state.
"I thought that they would go from some good days and some bad days. There is no doubt that the current situation is very serious and it is the most serious that we have faced," Straw told the BBC.
Al-Sadr forces kept control of Kufa and the center of the nearby holy city of Najaf, despite a vow by U.S. commanders Wednesday to crush the militia.
Any U.S. operation to oust the militiamen would be hampered by the hundreds of thousands of Shiite pilgrims who are in southern cities and roads this weekend for al-Arbaeen, which commemorates the end of the period of mourning for a 7th-century martyred saint.
Al-Sadr on Friday demanded U.S. forces leave Iraq, saying they now face "a civil revolt."
"I direct my speech to my enemy Bush and I tell him that if your excuse was that you are fighting Saddam, then this thing is a past and now you are fighting the entire Iraqi people," al-Sadr said in a sermon, delivered by one of his deputies at the Imam Ali Shrine, Shiite Islam's holiest site, in Najaf.
In Tokyo, Prime Minister Junichiro Koizumi vowed not to withdraw 530 troops in Iraq despite the seizure of three Japanese civilians. Militants have threatened to kill the three unless the troops leave Iraq. A senior aide to al-Sadr denied his militia was responsible for kidnapping the Japanese.
At least three other foreign civilians are being held captive.
Gunmen on the highway outside Baghdad were seen stopping a car carrying two Western civilians -- apparently private security guards -- since both had sidearms. The gunmen pulled the men from the car, firing at the ground to warn them to obey. Their fate was not known.
U.S. troops also came under heavy attack in Muqdadiyah, 55 miles northeast of Baghdad. Up to 80 insurgents ambushed a U.S. patrol late Thursday, prompting an overnight battle. At least three insurgents were killed and up to 20 wounded, said Lt. Col. Peter A. Newell.
Insurgents armed with automatic weapons and rocket-propelled grenades have put up stiff resistance in Fallujah, but Marines have said they are winning the battle, holding at one point about a quarter of the city.
The security firm that employed the four Americans who were killed in Fallujah, Blackwater USA, told The New York Times that they were lured into an ambush by members of the Iraqi Civil Defense Corps.
The Iraqis promised the Blackwater-led convoy safe passage, but suddenly blocked off the road instead, preventing any escape from waiting gunmen, Patrick Toohey, Blackwater's vice president for government relations said in Friday's editions.
Two senior Pentagon officials said an inquiry into the slayings was continuing.
In Najaf, a policeman watched helplessly Thursday as a pickup truck carrying a dozen heavily armed Shiite militiamen went past his police station -- already in the militia's hands.
Such action has raised concerns about the performance and loyalty of a police force that U.S. administrators are counting on to keep security in the future Iraq.
Coalition forces also have moved in to block the road between Kufa and Najaf, a senior aide to al-Sadr, Sheik Qays al-Khaz'ali, told the AP.
Al-Sadr, a young, firebrand anti-U.S. cleric, is thought to be holed up in his office in Najaf, protected by scores of gunmen. He has said he is willing to die resisting any U.S. attempt to capture him.
Al-Sadr supporters clashed with coalition forces in the southern city of Karbala and in Baqouba, north of Baghdad. At least six Iraqis were killed, officials said.
(Copyright 2004 by The Associated Press. All Rights Reserved.)