Tony Blair has defended the US-led attack on the Iraqi city of Falluja, saying the operation would stop now if terrorists give up their arms.
Tony Blair has repeatedly insisted the war was legal
The go-ahead for the assault, said Mr Blair, had come from interim Iraqi premier Iyad Allawi and was intended to ensure elections could happen.
But Liberal Democrat leader Charles Kennedy worried "moral capital" could be squandered in the attack.
And an ex-aide to Mr Blair has said the war went against the "rule of law".
Black Watch tribute
The exchanges came before news that one Black Watch soldier has been killed and two more injured in an incident north of Camp Dogwood.
A Downing Street spokesman said: "Our thoughts are with the Black Watch
battle group and their families after this incident.
"As the prime minister said this afternoon, we salute their dedication,
professionalism and sheer courage."
The Lib Dems are demanding a statement from Defence Secretary Geoff Hoon about the continuing role of British troops in Iraq before Mr Blair flies to meet President George Bush in Washington this week.
Earlier, as he reported to MPs on last week's European summit, Mr Blair defended the decision to move the Black Watch soldiers to central Iraq to free up American forces for the Falluja operation.
Mr Blair was reporting to MPs on the European Summit held in Brussels last week, which he said underlined the need for strong relations with both European nations and America.
He sent his condolences to the Black Watch soldiers killed last week after they moved to central Iraq to free up American forces for the Falluja operation.
"We have to hold firm, be resolute and see this through,
including in Falluja," he told MPs.
Mr Blair said the Falluja attack would stop "immediately if the terrorists and insurgents who are using Falluja as a base for terrorism would lay down their weapons to agree to participate in elections".
If terrorists "fighting democracy" were allowed to create effectively no-go areas for the Iraqi government, it made holding elections more difficult, added Mr Blair.
Conservative leader Michael Howard saluted the "outstanding dedication and professionalism" of the Black Watch troops.
The Black Watch have freed up forces for the Falluja operation
everything the prime minister has said about the importance of defeating terrorism in Iraq and
elsewhere," he told MPs.
Mr Kennedy said there was consensus on keeping the Iraqi elections timetable and having "no truck" with terrorists.
But he said there were real concerns about the possible civilian casualties the Falluja assault could produce.
"Whatever the events in Falluja, it is going to have to be essential that the Americans in the conduct of their activities do not squander moral capital which in turn undermines the legitimacy of that democratic process," said Mr Kennedy.
He was worried about suggestions there could be a Sunni boycott of the elections, which are planned in January.
Labour anti-war backbencher Alice Mahon asked whether an Iraqi city would be bombed every month if the Falluja attack failed "until all we have left in Iraq is rubble and hatred".
Responding Mr Blair criticised the Lancet magazine's recent suggestions there had been 100,000 deaths in the Iraq war.
He said the estimate was based on an extrapolation based on just 61 deaths.
Earlier, Mr Blair's former top foreign policy adviser Sir Stephen Wall voiced his worries about the conflict in a lecture at Chatham House.
He said: "It should not have been impossible to reach a common European view on Iraq before Britain became committed to an unstoppable course of action on the part of the United States.
"I believe that, in Britain, we allowed our judgement of the dire consequences of inaction to override our judgement of the even more dire consequences of parting from the rule of law.
"We have to be firm in our adherence to that rule of law, even if it sometimes means parting company with the United States and adhering to the United Nations as the only defence against the rule of might that we have."