The US military on Thursday said they attacked a safe house belonging to Abu Musab al-Zarqawi, accused by Washington of being an al-Qaida-linked "terrorist".
Hassan Ali Daly, Aljazeera's correspondent in the town, said US fighter planes targeted a building in the al-Jibail neighbourhood southwest of the town.
US planes had targeted another suspected safe house in Falluja last week.
Medical sources said 10 people were wounded in the latest air raid. Efforts were under way to clear the rubble of the house to rescue possible survivors buried underneath.
"On 30 June, multinational forces conducted another strike on a known Zarqawi network safe house in southwest Falluja based on multi-confirmations of Iraqi and multinational intelligence," Brigadier-General Mark Kimmitt, deputy director of operations for the US military in Iraq, said in a statement.
News agencies quoted some witnesses as saying that four bodies had been pulled from the house.
"The house was completely destroyed. It is basically rubble," said one resident in Falluja. "The strike left a huge hole where the building was."
Witnesses said clashes involving small arms and mortar fire had broken out between US forces and Iraqi fighters on the eastern edge of the town.
Aljazeera correspondent, Atwar Bahjat, reported that two Iraqis had been killed and another four, including a senior official at Iraq's interim finance ministry, were wounded in a large explosion in the al-Qadisiyah quarter in central Baghdad.
The official's name was Ihsane Karim Ghanem, according to a guard who was part of his escort.
An explosion was heard in A'dhamiyah district, likely to be caused by car bomb, he reported.
He added that a number of explosions were heard near the Green Zone where the US embassy is based. Columns of smoke were seen rising and US helicopters were hovering over the area.