The gunmen arrived in two cars, broke into the bakery in the northern suburb of Kazimiyah and abducted the workers on Sunday, police Lieutenant Mohammed Khayoun said.

The kidnappings came a day after a mortar shell hit a well-known market in the area, killing four people. On Saturday, a mortar shell hit the Isterbadi market in Kazimiyah, killing four people and wounding 13.

Elsewhere in the capital on Sunday, police found the bullet-riddled bodies of 10 men who apparently had been tortured, Lieutenant Thaer Mahmoud said.

A mortar shell hit the al-Sadiq University for Islamic Studies on Palestine Street, one of the capital's main thoroughfares, wounding five students and a teacher, police Lieutenant Ahmed Qasim said.

US search

US troops continued their search for two missing soldiers in Iraq, as a witness said the Americans were led away by masked gunmen after the attack that left one of their comrades dead.

A bomb exploded in a used clothes
market in Baghdad on Saturday

Ground forces, helicopters and airplanes fanned out shortly after Friday's attack, and US military spokesman Major General William Caldwell said on Saturday that four raids had been carried out.

He said a dive team also was to search for the men, whose checkpoint was near a Euphrates River canal near Youssifiyah, 20 km (12 miles) south of Baghdad - in the so-called triangle of death, named for the frequent ambushes against US soldiers and Iraqi troops in the area.

Ahmed Khalaf Falah, a farmer who said he witnessed the attack on Friday, said three Humvees were at a checkpoint when they came under fire from many directions. Two of the vehicles went after the assailants, but the third was ambushed before it could move, he told The Associated Press.

Seven masked gunmen, including one with what he described as a heavy machine gun, killed the driver of the third vehicle, then took the two other US soldiers captive, the witness said.

The US military issued no further comment on Sunday and the witness's account could not be verified.

US talks not on Iran's agenda

Abdul Aziz al-Hakim said direct
talks could help Iran and Iraq

Iran has no plans for direct talks with the United States on Iraq despite being encouraged to take part by an influential Iraqi politician, an official said on Sunday.

On Saturday, Abdul Aziz al-Hakim, leader of the Supreme Council for the Islamic Revolution in Iraq (SCIRI), a key Shia Muslim party connected to Iran, said in Tehran that such direct talks could benefit both Tehran and Baghdad.

However, he told reporters he was not an intermediary carrying messages from the United States.

"Talks between Iran and the United States are in Iraq's interests and could be in Iran's interests as well because the United States is present in Iraq and in the region," he said.

But Iran's Foreign Ministry spokesman Hamid Reza Asefi on Sunday told a news conference: "We do not have talks with the United States on the agenda now."