Ultimatum to Falluja

Iraq's interim prime minister warned the rebel-held city of Falluja yesterday it must hand over foreign militants, including America's top enemy in Iraq, or face a major operation to root them out.

Iyad Allawi's comments set a tough condition for negotiators seeking to defuse a months-long standoff between US forces and their Sunni Muslim foes in Iraq's most rebellious city.

Repeated US air strikes have targeted buildings the military say are used by Abu Musab al-Zarqawi, a Jordanian militant who has claimed some of the country's bloodiest suicide bombings and hostage beheadings.

"If Zarqawi and his group are not handed over to us, we are ready for major operations in Falluja," Mr Allawi told Iraq's interim national council. "I hope they (people in Falluja) will respond. If they don't, we will have to use force."

Defence Minister Hazim Shaalan also said militants had to be eliminated. "Terrorists are controlling a large part of Falluja and we will get them sooner or later. There are non-Iraqis among them, they are Arabs," he told the Saudi Okaz daily.

US troops called in air strikes on one Falluja district during fighting on Tuesday in which eight were killed.

Zarqawi's Tawhid and Jihad group cut the heads off two men it said were Iraqi intelligence officers and posted a video of their killings on the Internet. The United States has offered $25 million for information leading to the capture or killing of the Jordanian, whose group beheaded two Americans and a Briton kidnapped last month.

Two other Westerners are still missing in Iraq - French journalists Christian Chesnot and Georges Malbrunot - but the French government believes they are still alive. "Contacts have resumed," Communist Party leader Marie-George Buffet said after politicians met Prime Minister Jean-Pierre Raffarin.

Mr Allawi delivered his ultimatum shortly after Falluja's chief negotiator said a peace deal with the government was near.

"We are very close to reaching a final settlement. Our main condition is that the US army does not enter Falluja," said Khaled al-Jumaili, a Sunni cleric who belongs to the Mujahideen Shura (council), which wields some authority in the city.

Iraq's daily round of bombings, kidnappings and fighting has blighted postwar reconstruction efforts and cast doubt on whether elections due in January can go ahead on time.

In the latest violence, two US soldiers died when a suicide bomber blew up his vehicle next to a US military convoy in the northern city of Mosul.

Another bomb killed a US soldier in Baghdad before dawn yesterday and a similar attack killed three soldiers the night before, the military said. The deaths took the US combat toll to 823 since last year's US-led invasion.