US helicopter gunships have attacked insurgents in the rebellious Iraqi city of Falluja.
American tactics in Falluja have been criticised
TV pictures showed them firing missiles at targets and plumes of black smoke rising over the city's north-west.
They were called in to assist US marines besieging the city who say they were fired on as they attempted to occupy a railway station.
Latest reports say there were renewed US air attacks after nightfall, raising more smoke over the city.
Tuesday night saw an intense artillery barrage and the deployment of an AC-130 gunship.
US commanders say they want to avoid an all-out assault on Falluja, and that their forces are responding to breaches of a ceasefire.
They add that the insurgents have failed to surrender their heavy weapons by the latest deadline set by the US for them to do so.
"Our military commanders will take whatever action is necessary to secure Fallujah on behalf of the Iraqi people," President George W Bush said on Wednesday.
"There are pockets of resistance and our military along with Iraqis will make sure it's secure," Mr Bush said.
But in New York, UN Secretary General Kofi Annan made a plea for restraint.
"The more the occupation is seen as taking steps that harm the civilians and the population, the greater the ranks of the resistance grows," Mr Annan told a news conference.
US military spokesman Brigadier General Mark Kimmitt said there was still "a determined aspiration on the part of the coalition to maintain the ceasefire".
But the soldiers had a right to respond when attacked, the US spokesman added.
"A military solution is simple, quick and easy to turn on and off," Gen Kimmitt said.
But he added that "Falluja is more than a military problem" and talks with local leaders were continuing.
However, the spokesman said the coalition remained concerned that "these leaders who we remain engaged with are not capable of delivering".
The US military operation in Falluja began on 5 April following the gruesome killings of four American civilian contractors in the predominantly Sunni Muslim city.
The city lies 50km (30 miles) west of Baghdad and has been a hotbed of armed opposition to the US-led occupation of Iraq.
Local doctors say that hundreds of civilians have been killed in Falluja this month.
On the city's main road on Wednesday, several families were
seen fleeing the city.
"I was pinning some hope on the truce. The American air
bombing dashed my hopes," said Ali Muzel, as he escorted
his wife and five children to Baghdad.
American tactics in Falluja have been criticised by normally pro-US Iraqi politicians, as well as the United Nations special envoy to Iraq, Lakhdar Brahimi.
Mr Brahimi warned that they were threatening moves to return sovereignty to Iraqis and create a viable state.
"Unless this standoff is brought to a resolution through peaceful
means, there is great risk of a very bloody confrontation... the consequences of such bloodshed could be dramatic and
John Negroponte, who has been named as US ambassador to Iraq after the
handover of power to an interim government on 30 June, dismissed such concerns.
"There's no place for armed groups of this kind in the future of
Iraq and they must be dealt with," he told reporters.
"Sometimes force has to be met by force."
The UK government has defended the action of US troops in Falluja.
Prime Minister Tony Blair's official spokesman said: ''The insurgents launched an attack on troops, and if they're attacked they have the right to respond.''
He added: ''We'd like this resolved politically, but that's only possible if there is the will on the other side.''
A former US ambassador says President Bush is consulting with people in his administration that have a "skimpy knowledge" of Iraq.
Edward Peck, who was chief of the US mission in Iraq during the 1980s, told the BBC former US diplomats were preparing a letter for the president criticising his "badly conceived course of action" over Iraq.
"If you are in a hole, stop digging," Mr Peck told Radio Five Live's Up All Night programme.
The initiative appears to be similar to an open letter by former UK diplomats for Prime Minister Tony Blair, made public on Monday.