The government of Saddam Hussein has lost control over Baghdad after US forces advanced into the centre of the capital.
The crowd cheered as the statue fell
US tanks drove unhindered into public squares on the eastern bank of the Tigris for the first time, including the area surrounding the Palestine hotel, where the international media are based.
In a symbolic moment, an American armoured vehicle helped a crowd of cheering Iraqis to pull down a huge statue of Saddam Hussein in the Fardus square in front of the hotel.
Dozens of exultant people leapt on the deposed figure and stamped on it, shouting "Death to Saddam!".
US Secretary of Defence Donald Rumsfeld described the scenes as "breathtaking".
He said Saddam Hussein was "taking his place in the pantheon of failed brutal dictators".
US President George W Bush has said this is a historic moment.
However, his spokesman, Ari Fleischer said: "As much as the president is pleased to see the progress of
the military campaign ... he remains very cautious because he
knows there is great danger that can still lie ahead".
US Central Command has "added Baghdad to the list of places the regime does not have control", spokesman Vincent Brooks told reporters at the daily Central Command briefing.
The Americans have been advancing from three directions. There are still reports of resistance, particularly to the west of the city.
The BBC's Gavin Hewitt, who is travelling with the US 3rd Infantry Division in the west, says the scenes of welcome for the American soldiers witnessed in the centre have yet to be seen.
There has been no sign of the officials who have until now dealt with the media on a daily basis.
Mr Rumsfeld said that Syria - which he accuses of giving military assistance to Iraq - had helped members of the regime escape.
"Senior regime people are moving out of Iraq into Syria and
Syria is continuing to send things into Iraq. We find it notably
unhelpful," he said.
Mr Rumsfeld said he did not know the whereabouts of Saddam Hussein or whether he had survived the coalition advances.
The day began with cheering Iraqis greeting marines arriving in the Shia stronghold of Saddam City.
United Nations offices have been ransacked and the Olympic Committee building - headquarters of Saddam Hussein's elder son Uday - set on fire.
Television pictures showed people kicking images of Saddam Hussein and carrying off everything from elaborate vases to office furniture.
Our correspondent says people would not be behaving in this way unless they were sure Saddam Hussein's grip on the city had been broken.
But he added that, although the Shias who had been repressed by Saddam Hussein's regime were welcoming the marines as agents of change, the US is not popular in Iraq.
Other key developments:
- A spokeswoman for the International Committee of the Red Cross says the disorder means it is too dangerous to work in Baghdad. One Canadian Red Cross worker has died after his car was hit by gunfire on Tuesday.
The US military also says its warplanes can fly anywhere over Iraq with impunity.
- British soldiers take the first steps to restore order to the southern Iraqi city of Basra as looting begins to subside.
- Journalists with the Arabic television stations Al-Jazeera and Abu Dhabi TV are trapped overnight in the offices of Abu Dhabi TV by fighting between US and Iraqi forces
- Two US airmen are missing after their F-15 fighter jet went down over Iraq on Sunday, the US Defence Department says
- Two injured US special forces soldiers are rescued near Baghdad and taken to hospital in Kuwait, Central Command announces
Outside Baghdad, coalition forces have made a number of advances.
US forces were welcomed with joy by Iraqis
US forces in central Iraq have captured the division headquarters of the Iraqi 10th armoured division without a fight after the division's 15,000 troops vanish, the BBC's Andrew North reports.
He says the towns of Diwaniya and Amara have been secured, but resistance continues from Kut and Suq al Shuyoukh.
And, elsewhere in central Iraq, he says the situation in Hilla is unclear and there has been no word from Ramadi and Falluja
In the north, Kurdish sources say Kurdish fighters backed by US special forces have taken control of a strategically important mountain near the city of Mosul.
In eastern Iraq, US marines are close to linking up with UK troops coming from Basra in the south, opening an eastern supply corridor to Baghdad after taking positions without resistance on Tuesday, a BBC correspondent says.