Though a cease-fire is supposed to be in effect in the Iraqi town of Fallujah, intense fighting has broken out there between American Marines and Sunni rebels.

Marines opened fire on rebel targets in Fallujah. At least one American soldier and eight Iraqi fighters were killed in what reporters in Fallujah describe as several hours of intense fighting, accompanied by helicopter air strikes on Sunni rebel targets.

"Two U.S. Army tanks were called in, Cobra attack helicopters were also called in," said reporter Carl Penhall, who is with the U.S. Marines. "At that point, the platoon commander issued the order for his Marines to pull out and they did so. But at that stage, already four Marines were seriously wounded, six other Marines had received superficial shrapnel wounds."

In Baghdad, U.S. Army General Mark Kimmitt calls the latest fighting another breach of an agreed ceasefire and warns Marines are on the verge of storming the city.

"We certainly hope there is an epiphany on the part of the belligerents inside of Fallujah tonight to recognize that there are two tracks," said General Kimmitt. "There is a peaceful track, a peaceful settlement and there is a settlement that is achieved by a force of arms."

Another flashpoint remains in southern Iraq, in the Shiite holy city of Najaf where a cleric continues to lead thousands of militiamen in a revolt against coalition forces, despite so far fruitless attempts to negotiate an end to the standoff there.

About 2,500 coalition forces surround the city. A spokesman for the coalition, Dan Senor, again gave cleric Moqtada al-Sadr a chance to surrender, while issuing a demand that weapons must immediately be removed from inside Najaf's mosques.

"Everybody who wants to head off a potentially explosive situation in that area has an interest in seeing to it that mosques cease to be used for the stockpiling of weapons," said Mr. Senor.

In Baghdad, two coalition soldiers were killed Monday when a building they were searching for suspected chemical munitions exploded. The U.S. military is not confirming reports that the troops conducting the search were part of the Iraq Survey Group, the Pentagon team that has been looking for Iraq's weapons of mass destruction, which have yet to be found.