Masked fighters staged a show of strength in the western Iraqi city of Ramadi on Thursday, attacking a US base and seizing control of some streets, residents said.
Scores of heavily armed men set up roadblocks at key entrance and exit points to the city, a heartland of the insurgency in Iraq, and patrolled the main thoroughfares, residents said.
In some areas they dispersed after a few hours, but they remained in other parts.
Leaflets were distributed and posted on walls saying al Qaeda in Iraq, the group led by Abu Musab al-Zarqawi, the Jordanian militant, was taking over the city.
"Its followers will burn the Americans and will drive themback to their homes by force. Iraq will be a graveyard for the Americans and their allies," one leaflet read.
An internet posting from the group said the attack, dubbed "Battle of the Lions", was carried out to expose "the falseness of the crusaders' claims about their imaginary 'Steel Curtain'".
This was a reference to a recent US-led operation in western Iraq which officials said killed hundreds of insurgents.
After the initial attack, the situation calmed down, with groups of masked men holding ground but not firing their weapons. In other parts of the city the rebels dispersed, and some residents said American forces were starting to patrol again.
The assault on Ramadi, capital of Anbar province, began early on Thursday with a mortar and rocket attack on a US base in the city and on a nearby provincial governor's building.
"They've taken control of all the main streets and other sections of Ramadi," a reporter for Reuters there said earlier. "I've seen about 400 armed men controlling streets, some of which were controlled by Americans before."
The US military played down the assault. Captain Patrick Kerr of the US Marines said: "Reports of insurgents taking control of Ramadi are completely unsubstantiated. There have been a few sporadic small- arms engagements, but nothing out of the ordinary."
Ramadi has long been a focal point of militant activity in Iraq. After American forces overran Falluja in a massive offensive in November last year, many fighters apparently fled west to Ramadi, which is about 60km beyond Falluja.
Thursday's assault came the day after George Bush announced details of his strategy in Iraq, saying more efforts would be made to train Iraqi security forces to take on insurgents so that American forces could eventually withdraw.