Brigadier General Mark Kimmitt, the US-led occupation's deputy director for operations, said on Monday troops searched the facilities in Baghdad after receiving information suggesting they were involved in the production of chemical munitions.

But earlier reports suggested as many as 12 marines may have died.

An Iraqi policeman, who refused to give his name, said he saw "three US soldiers wounded or killed in each vehicle".

One witness, Imad Hashim, said the bomb went off "when they [US marines] tried to force their way in, there was a huge ball of fire and I was thrown to the ground".

Hashim said he was about 100m away from the blast.

Four Humvees were seen burning as US forces closed off the area, residents said they also saw rocket propelled grenades being fired into the Humvees as they passed by.

Confronting al-Sadr

Meanwhile, US occupation forces are set to enter parts of Najaf to kill or capture Iraq's most outspoken anti-occupation Shia cleric, Muqtada al-Sadr.

Confrontations have already erupted between the US military and members of al-Sadr's Mahdi army on the outskirts of Kuta.

Mahdi army fighters have been
awaiting a US attack for weeks

Shia leaders have warned there will be an explosion of anger among the 15 to 16 million Iraqi Shia if US soldiers enter Najaf.

But Brigadier General Mark Hertling, the deputy commander of the 1st Armoured Division, told journalists on Monday: "We're going to drive this guy [al-Sadr] into the dirt.

"Either he tells his militia to put down their arms, form a political party and fight with ideas not guns, or he's going to find a lot of them killed."

Shia resistance

Grand Ayat Allah Ali al-Sistani, Iraq's most revered Shia religious leader, has said if US troops enter Najaf or Karbala, they will cross "a red line" - implying general Shia resistance.

The US aims to make limited forays into the Iraqi cities they have besieged, asserting a measure of control without provoking battles.

"We will probably go into the central part of the city," General Hertling said. "Will we interfere in the religious institutions? Absolutely not."

However, Najaf is not a big city and it will be difficult for the US troops with their massive firepower to pursue al-Sadr and his Mahdi army militia without damaging the shrine or the vast cemetery.