The U.S. military in Iraq says a coalition air strike has destroyed a bomb-making factory used by insurgents south of Baghdad.

A military statement says coalition troops located the factory with the help of local residents, and called in the air strike early Wednesday morning. Ground troops later found explosives and as many as 80 barrels of unknown chemicals at the site.

In a separate incident Tuesday, the U.S. military says coalition forces killed one militant and captured another during a raid on the town of Balad, north of Baghdad. The military says the raid targeted an associate of a senior al-Qaida in Iraq leader.

Jubilant Iraqis carry a flag of Iraq's militia Mahdi Army after US troops dismantled checkpoints Sadr City, October 31, 2006

Also Tuesday, supporters of radical Shi'ite cleric Moqtada al-Sadr celebrated in Baghdad's Sadr City district as a blockade was lifted on orders of Iraqi Prime Minister Nouri al-Maliki.

U.S. and Iraqi troops abandoned their checkpoints around the Shi'ite neighborhood within hours of the decree. Earlier Tuesday, Shi'ite residents of Sadr City closed their businesses and schools in a general strike to protest the security barriers.

U.S. and Iraqi troops set up the cordon around Sadr City as part of a search operation for a missing American soldier, whom U.S. officials believe was kidnapped by Shi'ite militants.

In a separate development, Iraqi officials say they need about 100 billion dollars from donor countries to rebuild Iraq's infrastructure.

An Iraqi government spokesman  says the money is required over the next four or five years until Iraq reconstructs its oil sector. He called on the international community for help Tuesday at the opening of an aid meeting in Kuwait.