In a statement, the US military said the "precision strike" had been carried out in north-west Falluja at 3am (0000 GMT) on Tuesday.

"Multiple sources reported that a known associate of the Zarqawi network was present at the time of the strike," it said.

Residents confirmed houses had been destroyed but said they were empty, as its owners had fled the city due to the continued US attacks.

"As you can see, these houses belong to very poor and simple people. They left their houses because of the bombing that woke us up at 3am," said one witness.

"We were asleep in peace. I don't know what they want to achieve by doing that. Is there mujahidin in this place?  Is there al-Zarqawi in this place?"

Hospital staff said they had not received any casualties.

The US military said recent strikes had "severely degraded" the capability of al-Zarqawi's group and cited its recent declaration of loyalty to al-Qaida as a sign of weakness.

Residents' denial

Falluja's residents deny the existence of mujahidin led by al-Zarqawi in the city west of Baghdad and say civilians are the main casualties of US raids.

The US has placed a $25 million
bounty on al-Zarqawi's head

Scores of civilians have been killed and several homes destroyed in the US missile strikes on the town. 

Aljazeera has learned that a US armoured vehicle was destroyed in the Nassaf area in Falluja after it was hit by an explosive device. It is not know whether there were any casualties among the forces.
 
Al-Zarqawi's group changed its name last week to al-Qaida Organisation for Jihad in Iraq, reportedly saying in an internet statement that it had united with Usama bin Ladin's network. This could not be independently verified.
 
The US has offered a $25-million reward for al-Zarqawi's capture or death.

The US military and Iraq's interim government are widely believed to be preparing for a major offensive to bring Falluja back under state control before elections planned for January.
Clashes

On Monday, armed fighters and US forces battled in the city, according to Iraqi residents.

Witnesses said one civilian car was set ablaze during the clashes which lasted for 10 minutes.

The owner of the car said no one was inside his vehicle during the attack. 

Falluja residents say a mosque
was damaged by shelling

Residents said al-Mathidi mosque was also damaged by shelling during the clashes.

One resident said the US opened fire first on the mosque as the faithful left after prayers.

"The American tanks were passing by near the railway line in the afternoon. They opened fire on the mosque. The faithful had just left after the prayers and the shelling reached copies of the Quran inside the mosque," said Mahmud Shakir.

There was no immediate comment by the US troops on the clashes.

Elsewhere in Iraq:

Mosul

Two car bombs targeting a US military convoy in the al-Faisaliya area exploded on Tuesday, Aljazeera has learned.
 
Diyala

A member of the former Iraqi Governing Council, Niama Hasan Salih, was assassinated on Tuesday in the Diyala governorate when unknown armed men opened fire on is car. Salih was also a member of the al-Dawa Islamic party.

Baquba

Seven Iraqi policemen and two civilians were injured when an explosive device targeted police patrols in the centre of the city.
Clashes erupted early on Tuesday between US forces and armed men in the city after a joint headquarters of Iraqi police and US forces had been attacked.

Ramadi

Four Iraqis were injured by US fire after American forces were hit by an explosive device in the centre of the city.