Defence Minister Hazim Shaalan said he had renewed contacts with Falluja's chief negotiator, Shaikh Khalid al-Jumaili, and other local leaders who said a meeting could come as soon as Sunday. 

"We will resume talks once again with our brothers and will reach new results, God willing," Shaalan said on Saturday.

"Today, we will have a phone conversation to agree a meeting for this week to keep talks going." 

Shaalan's comments came as Aljazeera reported that an Iraqi was killed and his wife and children injured when US troops shelled their home in the al-Shuhada district of Falluja.

Hunting al-Zarqawi

Talks aimed at securing the return of Iraqi security forces to Falluja collapsed more than a week ago after interim Prime Minister Iyad Allawi threatened to attack the city unless it handed over Jordanian Abu Musab al-Zarqawi and his followers. 

"We will resume talks once again with our brothers and will reach new results, God willing"

Hazim Shaalan,
Iraqi Defence Minister

The US military said it had captured a lieutenant of al-Zarqawi, perceived to be America's top foe in Iraq, and five other suspects in an overnight raid on Falluja, 50km west of Baghdad. 

But residents of the city, say they know nothing of al-Zarqawi's fighters and that US raids take have killed dozens of civilians including women and children. 

A Falluja negotiator said the mujahidin shura (council) - a
body that says it represents at least some of the resistance forces in the city - along with local governors and tribal
shaikhs had agreed in principle to restart talks provided the 
US military halt daily air strikes. 

Compensation

Lieutenant Colonel Hakim Karim Midab told reporters that local leaders would demand residents who had fled the fighting be
allowed to return and be compensated for damage, and that US troops remove a checkpoint on the town's eastern entrance. 

Iraqi officials say Falluja must
turn in the Jordanian fighter

Midab said the city's leaders would also push for an Iraqi National Guard force that would include local residents to keep the peace between US forces and fighters in the town. 

Falluja has been in the hands of fighters since a US offensive in April failed to dislodge them.

The US military and the interim government it supports say
Falluja is a key base for al-Zarqawi's network, blamed for Iraq's bloodiest human bombings and beheadings. 

They have vowed to eliminate al-Zarqawi's group and retake all areas held by anti-government fighters before elections scheduled for January.