US and Italian troops fought Shi'ite militia in at least two towns in southern Iraq yesterday and Italy urged Washington to show restraint and work out a plan for the occupation forces to leave the country.
Secretary of State Colin Powell tried to patch up the damage to US authority in Iraq caused by the scandal of soldiers torturing detainees. But, with the return of Iraqi sovereignty just 45 days away, there was no sign of an end to anti-American violence or popular hostility to occupation.
One of Washington's closest Iraqi allies, Governing Council member Ahmad Chalabi, sharply criticised the military assault on Shi'ite insurgents in the south, especially in two holy cities. He said 1,000 people may have died in six weeks of fighting.
Mr Powell said US troops would stay for some time and should keep Iraqi forces under their command after the June 30 handover - but the Iraqi government would be truly sovereign.
Offering a new apology for the prisoner abuse, Mr Powell said in neighbouring Jordan: "Everybody says we should return sovereignty to the Iraqi people so that it no longer looks like an occupation. That's exactly what we are trying to do."
Iraq's interior minister told Reuters it was unlikely the new interim government would ask US-led forces to leave and that US troops should maintain freedom of action within Iraq.
As a new poll showed support waning for President George W. Bush's re-election in November, the Pentagon dismissed a report that US Defence Secretary Donald Rumsfeld personally approved interrogation methods which may have led to torture.
The New Yorker said a "special access programme" gave advance approval to kill, capture or interrogate key suspects. Initially used in Afghanistan, the magazine said Mr Rumsfeld expanded it to to Iraq when violence surged late last year.
Mr Rumsfeld and Mr Bush insist the abuse was limited to a few soldiers in one jail. The Red Cross and others have accused US forces of systematic torture across Iraq.
The sexual humiliations US guards meted out to detainees in Baghdad's Abu Ghraib and captured on film have undermined US credibility among Iraqis and other Arabs and put its allies in difficulty with their own electorates just as Washington is seeking broader UN involvement in Iraq.
Italian Foreign Minister Franco Frattini, whose government faces criticism at home for deploying the third biggest foreign force in Iraq, told Washington it must mete out "severe and public" punishment for crimes that have dominated Italian media.
The first of seven US soldiers charged faces a court martial in Baghdad on Wednesday - the day Prime Minister Silvio Berlusconi meets Mr Bush to discuss progress in Iraq.
Nine Italian soldiers were wounded yesterday in Nassiriya, where Shi'ite cleric Moqtada al-Sadr's Mehdi Army militia has staged what US commanders call a "minor uprising" across the south provoked by US assaults on its main bases in the Shi'ite holy cities of Najaf and Kerbala.
"We have asked the Americans to avoid frontal attacks on Iraqi holy cities and to hand over military control of these cities to Iraqi forces," Mr Frattini wrote in a newspaper. The Italian official running the administration in Nassiriya, Barbara Contini, was in a convoy which came under fire.
US tanks dominated the streets of Kerbala yesterday, exchanging fire from shortly after dawn with Sadr fighters who attacked with mortars and rocket-propelled grenades.
One guerilla was killed and three wounded, doctors said.
Ally turned critic Chalabi, once the voice of exiled Iraqis opposed to Saddam Hussein and himself a Shi'ite, sharply criticised US tactics. He said Washington's demands that Sadr let himself be arrested for murder was complicating Iraqi efforts to resolve the crisis.
"Enforcing Iraqi law should not be a US military objective," Mr Chalabi said. "I wonder why the price for enforcing an arrest warrant should be more than 1,000 Iraqi lives?"
In Najaf, Sadr aides accused British troops of murdering prisoners and mutilating their bodies. The guerillas buried 22 men they said died at British hands near Amara on Friday.
British officers said they killed about 20 fighters on Friday when soldiers fought off a series of ambushes. A defence ministry spokesman dismissed the accusations of maltreatment.
A US soldier was killed by a roadside bomb in the Baghdad area, bringing to at least 570 the number of killed in Iraq.