The US-led coalition in Iraq battled rebel cleric Moqtada Sadr's Mahdi Army militia and the growing fallout from the prisoner abuse scandal yesterday as the clock ticked down to the June 30 handover of sovereignty.
An oil pipeline blast in southern Iraq halved the rate of exports from the port of Basra, while two foreign nationals working on reconstruction projects were shot dead outside their home in the northern city of Kirkuk.
And a group of armed Iraqis threatened in a videotape to kidnap and murder workers employed by foreign companies in Basra.
In Fallujah, celebratory gunfire followed a meeting between US Marines and civic leaders after a symbolic Marine convoy entered the war-torn city, rocked last month by the worst fighting since the US invasion over a year ago.
But Marines officers indicated that rumors of a deal for a further pullout of US forces from the city were misplaced.
The military had announced on Sunday that public court martial proceedings would begin on May 19 for the first soldier charged in the prison scandal that has blackened the US' reputation across the world.
But the appearance of more photographs of Iraqis being mistreated by prison guards, charges by relatives of the accused that responsibility should go right to the top and an apology by British Prime Minister Tony Blair for the activities of his troops threatened to foment Iraqi anger.
Sixteen suspected members of the Mahdi Army were killed in eight battles in the Baghdad Shiite slum of Sadr City, a major recruiting ground for Sadr who is wanted over the alleged murder of a rival cleric last year.
"Sixteen anti-Iraqi forces were killed in the night in a series of incidents through the early morning," a US military officer said on condition of anonymity.
"The likelihood of them being Sadr militia fighters is high."
The fighting started around midnight in the Sadr City ghetto and lasted till 4am, the officer said.
The militiamen fired small arms, rocket-propelled grenades and mortars. Residents said US forces destroyed Sadr's local headquarters with tank fire.
US troops also battled the Mahdi Army in Baghdad on Sunday, killing 19 suspected insurgents, the day after they arrested two key aides in a midnight raid on Sadr's offices.
Tribal elders and supporters of Iraq's highest Shiite Muslim authority, Grand Ayatollah Ali al-Sistani, warned yesterday of a foreign plot to sow chaos in the holy city of Najaf by aggravating the standoff between radical militants and US forces.
Sistani follower and influential cleric Sadreddin al-Kubbanji convened a meeting of Najaf's tribal elders and repeated his earlier calls for the Mahdi Army to leave the city where Sadr has barricaded himself.
Celebratory gunfire rattled across the Sunni bastion of Fallujah, west of Baghdad, after Marines aboard a dozen armored vehicles entered the city on a symbolic tour and met with local leaders.
Iraqi police and masked insurgents shot off rounds and people flooded the streets, waving Iraqi national flags and honking their car horns in jubilation at what they mistakenly believed was a deal between the Marines and the city's political leaders to further scale back the US presence in Fallujah.
Marines spokesman Major T.V. Johnson squashed the rumors that the Marines were on the verge of a further withdrawal.
"Just because we have one meeting in town it doesn't mean we're leaving Fallujah," he said.
As US troops continued to battle insurgents on the ground, the military was preparing for the trial of Specialist Jeremy Sivits in Baghdad on May 19, the first court martial of a soldier over the alleged abuse of prisoners.
The charges relate to Sivit's time as a guard at the notorious Abu Ghraib prison outside Baghdad, and include "maltreatment of detainees" as well as "failing to protect detainees from abuse, cruelty and maltreatment."
If found guilty, he could be jailed for a year, demoted, thrown out of the army, fined and lose two-thirds of his salary for up to a year, a military legal source said.
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