The incident is being blamed on a resistance attack, and the death of the soldier was confirmed hours later by US Army officials.

The attack happened around 10pm in the Iraqi town of Ba'aquba and was aimed at soldiers of the US Army's 4th Infantry Division.

Meanwhile, two grenades were lobbed near the British embassy in Baghdad overnight, leaving two Iraqi bystanders injured, said US occupation sources.

The explosions hit a truck that was part of a convoy carrying containers destined for the British office. No one from London's mission was injured.

And in Basra two Iraqi civilians and and a foreign security guard were shot dead on Sunday during the second day of rioting.

It was unclear how the Iraqi civilians were killed. But British occupation troops said a Nepalese Gurkha security guard, working for Global Security was killed by "gunmen" while driving.

British armoured vehicles patrolled the streets with troops wearing protective body armour in sweltering heat. Angry crowds responded by barricading roads with burning tyres ... some hurled chunks of concrete at passing cars. 

A British military spokesman said troops were equipped and ready to deal with the rioting, a day after thousands of people took to the streets to protest against fuel shortages, in a country that has the world’s second largest oil reserves.

British soldiers shot dead three Iraqis described by officials as "gunmen" in Missan province in the south. The British base in al-Amara, Missan's capital, was hit by a rocket-propelled grenade without causing injuries.

In June, six British soldiers were killed in al-Amarah after crowds protested over aggressive house searches.

Earlier on Sunday, British officials said calm had been restored to Basra, as occupation troops delivered fuel tankers to gas stations and tribal leaders spoke to crowds as part of efforts to restore law and order to the country’s second largest city.

At least seven occupation soldiers and four Iraqi civilians were injured on Saturday in the chaos. The violence blew the lid off the notion that the British, whose patrol techniques were forged in strife-torn Northern Ireland, had found tactics for maintaining calm.

The rioting started minutes after witnesses said a grenade was hurled at a British military truck near a petrol station, where Iraqis waited for hours for fuel.

It was the most widespread violence seen in the mainly Shia area since American and British troops ousted Iraqi President Saddam Hussein.

Gasoline prices have soared from 150 Dinars (10 cents) for 20 litres to 12,000 Dinars (eight dollars), in a region where fuel smuggling is rife.

Soldiers fired rubber bullets injuring
four people, including a child
 

Since the occupation of Iraq started on 9 April, Iraq has suffered electricity and water shortages. Ordinary Iraqis are becoming increasingly frustrated with occupation forces who have so far failed to restore basic services.

“They did not give us what they promised and we have had enough of waiting,” said 19-year-old student, Hassan Jasim.

More violence

In related developments, 10 civilians, including an Aljazeera cameraman and  driver, and two US soldiers were injured in a grenade attack on a campus of Baghdad University.

US military officials said our correspondent and the driver were on campus to interview a Muslim US soldier.

A hand grenade was thrown from one of the upper floors of a building, reported our correspondent. An 11-year-old bystander was also wounded.

The entrance of the campus was the scene of the fatal shooting of British freelance journalist Richard Wild, last month.

An Iraqi boy prays over the
grave of a four-year-old killed in Hit

Resistance attacks swept American-occupied Iraq on Sunday.

Two US soldiers were wounded at dawn by a roadside bomb near Saddam Hussein’s hometown of Tikrit.

In the city of Haditha, about 150 km northwest of Baghdad, a US patrol came under attack without causing injuries. Soldiers set up checkpoints, following the incident in an effort to capture the assailants.

In a move likely to increase tensions, US soldiers detained a leading Shia cleric overnight in Ba’aquba, about 60 km northwest of Baghdad.

US soldiers withdrew from Hit, about 160 km west of the capital on Saturday after occupation forces agreed to hand over security to local authorities, reported our correspondent.

The move came after a US helicopter fired at an Iraqi civilian and his daughter, killing them both. Local witnesses said a four-year-old boy was also killed during gun battles between US soldiers and Iraqi resistance fighters.

Meanwhile, the US military said an American soldier died of apparent heat stress while riding a convoy in al-Diwaniyah, about 150 km south of Baghdad.

At least 59 US soldiers have died in "non-combatant" incidents in Iraq since 1 May when US President George W Bush declared an end to hostilities.