Bremer warns of 'explosive' Najaf

Moqtada Sadr's militia remains holed up in Najaf

A highly dangerous situation has been developing in the Iraqi holy city of Najaf, the top US administrator warns.

Paul Bremer's spokesman said militants were stockpiling weapons and ammunition in mosques, shrines and schools.

Several children are reported to have died in crossfire after an attack on a US military convoy in Baghdad, which also killed an American soldier.

In the northern city of Mosul, four Iraqis died when rockets were fired at a hospital and a hotel on Sunday.

A police station was also hit, and at least 15 people were injured.

Mr Bremer's spokesman Dan Senor said the United States was "cautiously optimistic" about the situation in the battle-scarred Sunni city of Falluja, west of Baghdad. Earlier, US forces threatened to resume an offensive against insurgents who refuse to hand over their heavy weapons.

Iraqis vent their anger on an abandoned US army vehicle

The AFP news agency reports that town elders from Falluja have written to UN Secretary General Kofi Annan, urging him to mediate between the militants and US troops to bolster the fragile truce.

Mr Senor said Iraqi citizens must make it clear they would not tolerate the stockpiling of weapons in mosques and schools in Falluja and Najaf.

There are no immediate plans to send in troops to arrest Shia cleric Moqtada Sadr blamed for the unrest in Najaf, a US military spokesman said.

The spokesman, Lt Gen Mark Kimmitt, was unable to confirm reports by the Associated Press news agency that US troops were likely to enter parts of Najaf soon.

AP quoted a US commander as saying US troops would go in, but would stay away from sensitive holy sites in the city centre.

Falluja deal

US President George W Bush has spoken to his top general in the Middle East to discuss security in Iraq, particularly in Falluja.

A new deal was reached on Saturday to begin joint coalition patrolling with local Iraqis in the western city from 27 April, when anyone seen possessing a weapon will be considered a "hostile target".

US marines launched an assault on the city on 5 April, following the murder of four American security contractors there at the end of March.

The New York Times reported on Sunday that Mr Bush and his senior aides were expected to decide this week whether to order a resumption of the offensive in Falluja.

Children in crossfire

In the Baghdad violence on Sunday, a US soldier was killed in a roadside blast and several people, including children, were hit during a subsequent gun battle.

After the bomb exploded in eastern Baghdad, US troops evacuated the dead soldier, Gen Kimmitt said.

Coalition troops who later sought to recover the Humvee vehicle damaged in the blast returned fire after being targeted from rooftops.

"Civilians, apparently including children, were caught in the crossfire," the US military said.