Children killed in Baghdad attack

Several other people were injured in the mortar attack

Two Iraqis boys have been killed in a mortar attack in central Baghdad, medical officials say.

They were reportedly playing with other children near the Tigris river when at least two mortar round landed nearby.

In a separate incident, one person was killed when a US C-130 military cargo plane was hit by gunfire after taking off from Baghdad airport.

Blasts were also heard at the US-led coalition headquarters - just days before the 30 June handover of power.

Plumes of smoke were seen rising above the heavily fortified area known as the Green Zone, but there were no reports of casualties.

'Credibility crisis'

After the mortar attack near the Tigris, the riverbank was stained with blood and there were holes gouged in the ground.

US troops have stepped up security in Baghdad

"Two children were killed and eight wounded, three of them seriously," Dr Walid Hamid at Baghdad's al-Kindi hospital told the AFP news agency.

The latest attacks came after the pledge by Iraq's interim Prime Minister Iyad Allawi to crush the insurgents.

But Mr Allawi stressed he would distinguish between foreign militants and Iraqis who may have acted against the occupation out of desperation.

The prime minister knows he faces a huge challenge and not just in trying to stop the violence, the BBC's Caroline Hawley in Baghdad says.

The prime minister has acknowledged the country's dire economic problems and its lack of services and he has spoken of a crisis of credibility that his government will have to address, our correspondent adds.