Abu Azzam, a financier and religious aide to Abu Musab al-Zarqawi, believed to be of Palestinian origin, was shot and killed on Sunday when US and Iraqi forces raided a house in Baghdad on the basis of information provided by an Iraqi citizen, Iraq's National Security Adviser Muwaffaq al-Rubaei said.
"We had a tip from an Iraqi citizen that led us to him," said Lieutenant-Colonel Steve Boylan, a spokesman for the US military in Iraq.
"It was a joint US-Iraqi operation. We've been tracking him for a while," he said on Tuesday.
General Wafiq al-Samaraei, Iraq's presidential adviser on national security affairs, told Aljazeera: "Another person called Abu Nasir, the second man in al-Qaida's organisation in western Iraq, and 28 others were also killed on Monday in an air strike targeting an area near al-Qaim city."
US intelligence officials meanwhile have admitted that al-Zarqawi's network of al-Qaida-linked fighters is emerging as a self-sustaining force, despite repeated blows by US forces and the reported death of his second-in-command.
Abu Musab al-Zarqawi reportedly
heads al-Qaida in Iraq
"The suggestion is that this has shifted from being a terrorist network to a guerrilla army," said Vali Nasr, a national security affairs expert at the Naval Postgraduate School in Monterey, California.
Another official added that al-Zarqawi had enough force in place to sustain operations.
"Al Qaida in Iraq ... regenerates very quickly. You knock off a guy who's in charge in a certain area, another person steps into the gap."
Iraqi police said on Tuesday that they had found 22 bodies of shooting victims near the town of Kut, southeast of Baghdad.
Police said the victims had their hands bound and had plastic bags over their heads.
The decomposed bodies appeared to be several days old, they added.
Police sources said the victims were wearing civilian clothes but some had police identification cards.
Al-Samaraei said Arab Iraqi tribes had started to cooperate with the government and the US-led forces in Iraq to face "the terrorists Iraqis are fed up with".
"Al-Qaida and other terrorist organisations are deployed in many areas in Iraq. What has happened in Tal Afar is the best example of this," he said.
"We have called on citizens to go back to their homes as the government would protect them"
Presidential adviser on national security affairs
"We have called on citizens to go back to their homes as the government would protect them, it would not launch strikes against them," he added.
The New York Times reported that Central Intelligence Agency operatives were involved in the operation that led to Azzam's killing, but Boylan could not confirm that.
Meanwhile, at least 10 police volunteers were killed and more than 20 others injured in an explosion in central Baquba, Aljazeera learned from Iraqi police sources.
The attack occurred in Baquba, 50km north of Baghdad, on Tuesday where the Iraqis were submitting applications to join the Quick Reaction Police Force, said a police commander who spoke on condition of anonymity because of concerns about his security.
Iraqi journalist Husain al-Azzawi quoting Iraqi police sources, told Aljazeera that a bomber wearing a belt of explosives blew himself up at 10am [0700 GMT] on Tuesday among a crowd of Iraqi police volunteers.
Toll to rise
He said the number of casualties was expected to rise as a large number of volunteers had gathered at the police station at the time of the attack.
US soldiers search a motorist
amid a spurt in car bombings
The Baquba office of the Quick Reaction Police Force has come under attack several times, al-Azzawi said.
In other developments, three Iraqis were killed by US firing in Ramadi, Aljazeera learned from Iraqi medical sources.
The incident took place after a US patrol came under a bomb attack that destroyed an armoured troop carrier.
In western Ramadi, an Iraqi was killed and four others were injured when US bombs fell on a market in the al-Ubaidi area. The attack damaged many shops, Iraqi police sources told Aljazeera.