There is ongoing violence across the country
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Baghdad's city council has held its first meeting, hailed by the United States as a major step towards democracy.
The top US official in Iraq, Paul Bremer, praised the 37 delegates, who were chosen at local meetings around the capital, for volunteering to serve "this wonderful city".
The meeting came amid further violence in and around Baghdad, with three US soldiers and two Iraqis killed in three separate attacks since Sunday.
Critics have complained at the slow progress towards direct elections in Iraq, with the formation of an Iraqi national government expected to be at least a year away.
Advisory
Baghdad's new council, made up of both men and women, has only an advisory role at this stage, but Mr Bremer promised the council's views would be taken seriously.
"Today marks the resumption of the democratic system in Baghdad which has not been here for 30 years," he told the council.
"At a time when malicious people in Baghdad are making a threat to the peace-loving citizens of this wonderful city, you have shown courage and honour, perseverance and self confidence," he said.
Khaled Mirza, a dentist chosen as the council's interim chairman, told Reuters news agency he was convinced he was doing the right thing.
"I am not a stooge for the Americans," he said.
An elected city council in the southern Shia Muslim city of Najaf also held its first meeting on Monday.
Soldiers killed
Overnight, two US soldiers and two Iraqis were killed in three separate incidents, as violence continued against the US-led forces in Iraq.
The first soldier was killed in an exchange of fire with two Iraqis in Baghdad, one of whom was shot dead, the US military said.
A second soldier was killed by a homemade explosive device in the north of the Iraqi capital.
In the town of Ramadi, 100 kilometres (60 miles) west of Baghdad, attackers fired rocket-propelled grenades at US vehicles, wounding four soldiers.
In the shoot-out which followed, an Iraqi man was killed and his son injured as they sat in a car.
Residents said neither of the two Iraqis had been involved in the attack on US troops.
The attacks followed the death on Sunday of a US soldier who was shot in the head at the university campus in the centre of Baghdad.
Murder rewards
Tensions have been high in the town of Ramadi since an explosion on Saturday killed seven Iraqi police recruits as they graduated from a US-taught training course. Dozens of Iraqis were injured.
The US military blamed the attack on Saddam Hussein loyalists.
Twenty-nine US soldiers have been killed in combat in Iraq since US President George W Bush declared major hostilities over on 1 May.
The US official in charge of setting up Iraq's police has promised rewards for information relating to the killing of coalition forces or Iraqi police officers.
Bernard Kerik, a former New York police chief, told the BBC the minimum reward would be $2,500.
The US has offered a $25m reward for information leading to the capture of ousted Iraqi President Saddam Hussein.
Last week, Al-Jazeera television broadcast an audio tape purporting to be from Saddam Hussein, in which the speaker urged Iraqis to resist the US-led forces in Iraq.