AFP quotes a top military officer as saying the No. 2 Pentagon official escaped uninjured when 29 heavy rockets slammed into the  landmark al-Rashid Hotel at 0310 GMT on Sunday morning.

Unconfirmed reports said that the person killed was an American, and among the injured were US Defence Department employees, soldiers and foreign nationals. 

The al-Rashid Hotel is frequently used by American military personnel. Wolfowitz and other senior aides were staying on the 12th floor when the building was attacked. The rockets destroyed rooms below the 12th floor.

Witnesses said Wolfowitz, a major force behind the Iraq war, looked composed as security forces led him away from the hotel. In a show of defiance, the assistant secretary said later that the US would not be cowed into abandoning Iraq after the brazen attack.

The hotel is in an area sealed off with heavy security inside the main centre of coalition operations.

A senior defence official told reporters on the scene that according to security briefings, the rockets may have been set up on Saturday night and then remotely detonated the following morning.

Wolfowitz was paying his second visit to Iraq in three months and had stressed the need to speed up the formation of a new Iraqi army, police force, border guard and civil defence corps.

Three rockets, fired at the al-Rashid Hotel a month ago, hit the building but caused no injuries.