Ms Hashimi is one of three women on the 25-member Council
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The American civilian administrator for Iraq, Paul Bremer, has condemned the shooting of a member of the country's Governing Council, calling it an "horrific and cowardly act".
Aqila al-Hashimi was leaving her home in western Baghdad by car when unidentified gunmen opened fire, causing the vehicle to crash.
She was taken to Yarmouk hospital in Baghdad before being transferred to a US military hospital, where she is being treated for serious injuries to her stomach, shoulder and leg.
She is the only Governing Council member to have served in the former government of Saddam Hussein and one of only three women on the council.
"This senseless attack is not just against the person of Aqila al-Hashimi, it is an attack against the people of Iraq and against the common goals we share for the establishment of a fully democratic government," Mr Bremer said in a statement.
Ms Hashimi was preparing to travel to New York next week as part of the Iraqi delegation to the United Nations General Assembly that hopes to occupy Iraq's seat at the UN.
The incident is the latest in a series of often deadly attacks on Iraqi figures viewed by Saddam loyalists as collaborators with the American occupying forces - including the bombing in Najaf in August that killed Ayatollah Mohammed Baqir al-Hakim and more than 100 others.
'No intimidation'
Members of Ms Hashimi's security team said the attack was carried out by men in two new four-wheel drive vehicles who launched rocket-propelled grenades that missed the car, before firing Kalashnikov assault rifles.
US troops are attacked almost daily in Iraq
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The gunmen struck shortly after the councillor left her home in western Baghdad at about 0845 local time on Saturday (0445 GMT).
Bullet holes in a tree, bloodstains by the roadside and damage to a garage and a garden wall were visible at the scene, Reuters reported.
Hospital officials said three of her bodyguards had also been injured in the attack.
Ahmad Chalabi, president of the Governing Council for September, said: "The members of the Governing Council and ministers will not be intimidated by the terrorists."
Former Saddam official
Ms Hashimi, who is a Shia Muslim, sits on the 25-member Governing Council, set up by Mr Bremer in July as part of efforts to hand power over to Iraqis.
The career diplomat's appointment surprised observers. She is the only former Baath party member on the council, having held a senior post in the foreign ministry.
She holds a doctorate in modern literature and is reported to have been a close colleague of former deputy prime minister Tariq Aziz.
She is thought to be the first member of the council to have faced an assassination attempt.
Some Iraqis have criticised the Governing Council and the process by which it was set up, saying it is merely an extension of the coalition authority, with no real power or independence.
Iraqi insurgents have launched daily attacks on US-led occupation forces that have killed 76 American soldiers.
Correspondents say criminal activity in Baghdad has also surged in the lawless environment that has developed since the war.