Baghdad — An explosion leveled part of a building as U.S. troops searched it for suspected production of "chemical munitions," a U.S. general said Monday.

 

Several Iraqis and two U.S. soldiers were killed and five wounded, and a cheering mob of Iraqis looted their wrecked Humvees, taking away weapons and equipment.

 

Brigadier-General Mark Kimmitt did not say what sort of chemical munitions were believed to be produced at the site. After the blast, there was no sign in the area of precautions against chemicals.

"Chemical munitions could mean any number of things," including smoke grenades, he said.

Heavy fighting broke out in Fallujah, west of the capital, despite attempts to extend a ceasefire.

In the south, U.S troops rolled into a base in Najaf to replace Spanish forces who are withdrawing and to increase pressure on the militia of anti-U.S. Shia cleric Muqtada al-Sadr. The deployment brings the Americans about five kilometres from holy sites at the heart of the city.

 

U.S. commanders have said they will not go near the holy shrines in the city's ancient centre, a move that could spark widespread outrage among Iraq's Shia Muslim majority.

 

The U.S. military will take over security duties throughout Najaf province and the neighbouring province of Qadisiyah after the withdrawal of Spanish, Dominican and Honduran forces this month, said a Polish spokesman, whose country's forces lead multinational peacekeepers in the area.

 

The extension of its forces would be a major reversal of U.S. efforts to hand security duties in the south to its allies. But the coalition has been frayed by the Spanish-led pullout and the eruption of fighting in the previously more peaceful south.

 

Spain's former prime minister, meanwhile, issued his harshest public assessment of his successor's policy shift, calling the planned pullout of Spanish troops “appeasement.”

 

The Baghdad explosion occurred when U.S. troops broke into a shop on the ground floor of a building in the northern Waziriya district. Moments afterward, the blast went off, levelling the front half of the one-storey building and setting ablaze four Humvees parked outside.

 

A female soldier was seen being taken away by troops, her face and chest severely burned. Witnesses reported seeing up to 10 U.S. soldiers being loaded into ambulances. A U.S. military spokesman confirmed that vehicles were destroyed in the blast but could not confirm U.S. casualties.

 

Several Iraqis were pulled from the rubble.

 

Teenagers later dragged away one of the burned-out Humvees, stripped it of equipment, and set it ablaze again. Some were seen afterward waving U.S. weapons.

 

Residents differed over what was in the building. Some said it held a perfume factory, others said there has once been a scrap metal workshop that repaired weapons and recycled old ammunition.

 

Monday's fighting in Fallujah sent two large columns of heavy black smoke over the northern Jolan district, a poor neighbourhood thought to have a large concentration of Sunni insurgents.

Explosions rang out, along with the sound of mortars and heavy machine guns.

 

The fighting came a day after U.S. officials announced that a fragile ceasefire would be extended for two days and that political efforts at a resolution would continue, backing off warnings earlier this week that U.S. marines could launch a full-fledged offensive in the city within days.

 

As part of the extended ceasefire, marines are to begin joint patrols with Iraqi security forces in Fallujah — a measure aimed at showing some degree of control in the city without launching a new assault.

 

Marines began training Iraqi security forces on Monday to join them on patrols, which are due to start by Thursday.

 

The move carries a risk: There is little guarantee that guerrillas — who the marines say have not abided by other parts of past negotiated agreements — will not attack the patrols.

 

Marine Lieutenant-Colonel Brennan Byrne said the foot patrols would be backed by armour and air support. He said patrols coming under fire would not necessarily spark a renewal of a general U.S. offensive.

 

“We're perfectly happy to move down the street, destroy a bad guy over here and just continue on with the patrol,” he said.

 

In Najaf, about 200 troops and military police rolled into the Spanish base. The move deploys U.S. troops within the Najaf urban area for the first time since a large force massed outside the city earlier this month to put down the Mahdi Army militia of Mr. al-Sadr.

 

The base compound was pockmarked with shells and shrapnel from earlier attacks. The golden domes of the Shia shrines at Najaf's centre — a no-go zone for the Americans — were visible from inside the compound.

 

Overnight, Mr. al-Sadr's forces shelled the base with 21 mortars, and one Salvadorean soldier was wounded, said Colonel Pat White, the commander of an armoured regiment that moved into the base.

 

Spanish troops there are due to leave within days, and the Americans moved in to ensure that Mahdi Army militiamen did not overrun the site.

 

“We are going in to allow the Spanish troops to leave safely and so that the compound is not left empty,” Col. White said. “We don't want al-Sadr's militia to take it over. It is not an offensive operation.”

 

The move also gives U.S. forces a foothold in Najaf from which to pressure Mr. al-Sadr, who is holed up near the shrines.

 

The base — actually two adjacent bases called Baker and Golf, one with Salvadorean troops, the other with Spaniards — lie in the modern part of Najaf, an urban extension that melds with the neighbouring city of Kufa.

 

Phil Kosnett of the U.S.-led coalition authorities in Najaf said Mr. al-Sadr's people are “trying to project the image of Najaf as a calm and peaceful place, but people are very frightened, they want al-Sadr to leave.”

 

Businesses are open part time, most schools are closed and the local government is basically shut down, he said. “We continue to be mortared every night ... talk of a cease-fire is ludicrous.”

 

U.S. troops will take over security duties across Najaf and Qadisiyah provinces around May 27, said Polish Col. Robert Strzelecki, spokesman of the multinational troops that control those provinces and three others.

 

Spain, Honduras and the Dominican Republic — under the Polish-led force — have been patrolling Najaf and Qadisiyah.

 

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