Two Iraqis, One Us Soldier Dead in Baghdad Clashes

Baghdad was rocked by further unrest today, as two Iraqis and one US soldier were killed in fresh confrontations between locals and occupying forces.

In the first incident, US central command said one soldier was shot dead and another wounded in an attack on a petroleum gas distribution plant in the capital.

The gunmen approached on foot and fired at close range at the soldiers who were guarding the facility. They then fled to a waiting vehicle about 100 metres away and escaped, captain David Gercken said, quoting a witness.

Earlier, the US army confirmed that two people had been killed when its troops opened fire on a crowd of ex-Iraqi soldiers who were protesting against the loss of their jobs.

The incident took place outside the former presidential compound which now serves as the headquarters for the country's US-led administration.

A US official said members of the 204th Military Police Company opened fire in self-defence after one demonstrator "pulled out a weapon and began shooting" as a military convoy entered the compound.

Two Iraqis "were evacuated to 1st Armoured Division Battalion aid station and confirmed dead", central command said in a statement.

Victor Caivano, a photographer for the Associated Press, said shots were fired when the angry crowd began throwing stones at guards and reporters outside the main gate of the compound.

Some of the protesters, who lost their jobs last month when the US administrator, Paul Bremer, dissolved Saddam Hussein's armed forces, attacked a Reuters television crew.

They attacked two Iraqi cameramen, one of whom was beaten on his shoulders, neck and head with stones. US soldiers guarding the gates pulled the other man out of the crowd to safety.

The demonstrators also hit passing UN and other vehicles with their shoes, witnesses told Reuters.

Mr Bremer's drive to destroy the legacy of Saddam Hussein's Ba'athist state apparatus has led to the loss of up to 400,000 jobs in the armed forces, security services, and information and defence ministries.

Critics say the sweeping policy fails to distinguish between the men who enforced Saddam's regime, the many who joined the party out of expediency and those who genuinely believed in its Arab nationalist ideology.

They say the policy has created a large pool of armed and resentful unemployed who may turn to crime or to fighting the US-led occupation, perhaps as part of a Ba'athist underground.

At least 41 American soldiers have been killed in a spate of attacks in and around Baghdad since the US president, George Bush, declared the war in Iraq over on May 1.

The demonstration took place as US troops intensified their searches in the capital for illegal weapons and supporters of Saddam's regime.

Before dawn today, troops sealed several streets of the Karrada neighbourhood, and called residents from their beds to stand in the street as they searched their homes. One man was taken away with his hands bound behind his back.

The military says about 400 people have been arrested since the latest operation, dubbed Desert Scorpion, began on Sunday. The searches have aroused widespread resentment, despite what the military says are efforts to show sensitivity without endangering the soldiers.