US forces were now containing the situation in Fallujah, with southern Iraq "largely stabilised", Secretary of Defence Donald Rumsfeld insisted on Thursday.

In Falluja, Aljazeera's correspondent said explosions continued throughout the night on Wednesday with the warplanes striking several districts over the city.

Hospital officials said the casualties were from the Shuhada, Jolan, Shurta and Askari quarters. 

Three paramedics were also wounded when US warplanes struck an ambulance which was on its way to assist the injured in the Shurta district.

"While there are still various attacks and incidents ...  the coalition has had good cooperation from the moderate Shia leadership," said Rumsfeld in Washington. He admitted occupation forces had had "a tough period of days in Iraq".

Family killed

A rocket attack blamed on US occupying forces has killed a mother and her two teenage sons north of Baghdad and badly wounded her two daughters, neighbours and hospital officials said.

Resistance fighters are blaming
US forces for breaking truce

Two rockets slammed into houses in a residential neighbourhood of Baquba, 65km north of the capital, at around 5:00am (01:00 GMT). Walls crumbled, debris was strewn
through the homes and a car was destroyed.

At Baquba hospital, the family's two daughters lay in a ward, one semi-conscious and both badly wounded. Outside, three coffins were readied to bury the dead.

Residents blamed the attack on the US occupying forces. The US Army said it had no immediate information. Local police said they were still trying to find out what happened.

"The first hit was just before 5 am," Mahdi Salih said. "The victims were our neighbours, they lost people. Why? It was an innocent house, innocent. The Americans want to harm Iraqis? Why?" 

Highway attack

The US army vehicle was hit by
rockets and set ablaze

Meanwhile, a US military vehicle was hit by rockets on a highway west of Baghdad on Thursday morning.

Witnesses said the vehicle was ablaze. No casualties were reported, according to Aljazeera's correspondent.

At the same time, the correspondent reports that three Jordanian businessmen heading for their home country on Wednesday were killed on the Ramadi highway when their car came under heavy fire.

A US helicopter was reported hovering in the area.  

Najaf

Outside Najaf, 2500 US troops are preparing for a possible assault to capture Shia leader Muqtada al-Sadr. Troops scoured the area around the city, combing through mangroves, villages and the desert in search of al-Sadr's supporters.

Meanwhile, two US occupation soldiers were killed in in the northern Iraqi cities of Samarra and Mosul in the last 24 hours, a US army spokesman said on Thursday.

He gave no other details.