Saddam Hussein's two sons, Uday and Qusay, have been killed by US troops in Iraq, the United States military has said.
The Americans pounced after a tip-off from an Iraqi source
Their bodies were identified after 200 US soldiers, backed by helicopters, stormed a house in the northern city of Mosul following a tip-off from an Iraqi source.
A US commander in Baghdad said he was "certain" the two had died in the fierce gun battle in Mosul.
Reports of the deaths of the two men - among the most influential and most feared in the Saddam regime - were welcomed on the streets of Baghdad where revellers fired shots in the air.
And the BBC's Gordon Corera in Washington says the news of the deaths could not come at a better moment for the Bush administration which is under pressure over daily troops casualties and a row about intelligence.
However, attacks continued on Wednesday with a military convoy coming under rocket propelled grenade fire west of Baghdad, just outside the town of Ramadi.
Soldiers at the scene have been receiving medical treatment. It is not known if there are any fatalities.
US troops hunting for Saddam's sons came under fire as they approached the villa in the northern part of Mosul.
The Americans responded with rocket fire from helicopter gunships in an operation lasting six hours. Four US soldiers were wounded in the fighting.
"We've used multiple sources to identify the individuals," Lieutenant General Ricardo Sanchez said, adding that the bodies of Uday and Qusay were in an identifiable condition.
Two other people were killed along with the former Iraqi president's sons. They have not been named but reports say one may be a teenage son of one of the brothers and the other a bodyguard.
More details are expected to be released on Wednesday.
Correspondents say the Iraqi who apparently tipped off the US military stands to gain at least part of two rewards each worth $15m which Washington placed on the heads of Uday and Qusay.
The reported deaths triggered a 5% fall in world oil prices as analysts predicted less tension in oil-rich Iraq.
The BBC's world affairs correspondent, Mike Wooldridge, says that only the capture or killing of Saddam Hussein himself could be of greater significance than his sons' deaths.
They played such legendary roles in Iraq's iron-fist rule that their hold over people continued even while they were at large.
Gunfire erupted across Baghdad on Tuesday evening in what was apparently celebratory fire to greet the news of the deaths.
"Uday and Qusay are dead, we saw it on TV," one man, Hassan Zaif, told AFP news agency after emptying the magazine of his Kalashnikov into the air.
But Alaa Hamed, a producer at Uday's former television channel was disappointed by the news.
"I don't want him dead. I want to torture him first," he told Reuters news agency, recalling how Saddam's son had beaten him with electrical cables when he made mistakes.
Saddam's sons were numbers two and three on America's 55-strong most-wanted list.
UK Prime Minister Tony Blair said it was a "great day for the new Iraq".
"The celebrations that are taking place are an indication of just how evil they were."
Paul Bremer, the US administrator in Iraq, described the news as a "great day for the Iraqi people and for the US military who showed their outstanding professionalism".
News of the deaths was greeted by celebratory fire in Baghdad
Ahmed al-Haboubi, a former Iraqi cabinet minister from the pre-Saddam years, said the two sons had met "the fate of every tyrant and his associates".
Speaking from exile in Cairo, he said that it would have been better had they been captured and brought to trial for their "atrocities and crimes".
Qusay, 36, had become Saddam Hussein's heir apparent and controlled key areas of the country's security apparatus, with responsibility for concealing any weapons of mass destruction
Uday, 39, controlled much of the media and was centrally involved in the illegal international trade which helped keep the regime in power
He had a reputation for brutality which rivalled only that of his father, Saddam Hussein, BBC analyst Magdi Abdelhadi said.
He once killed an assistant to his father and ordered corporal punishment for players of the national football team whenever they lost a match.