American Marines appear to be preparing for an+ assault on the Iraqi town of Fallujah, where military commanders are warning they are poised to resume battle if Sunni insurgents do not quickly comply with an agreement and begin handing in heavy weapons.

Hundreds of additional Marines are repositioning closer to Fallujah, where American forces already in the city have been coming under renewed attacks from Sunni fighters. The U.S. military says 36 more insurgents have been killed in more battles with Marines since Wednesday, after the Marines came under small arms and rocket propelled grenade fire. The coalition says Fallujah mosques have also been heard blaring messages telling Fallujans to rise up and fight.

Under an agreement, militants were supposed to hand in their weapons in exchange for Marines allowing residents to return to their homes and for relief aid to get into the city. But U.S. Army General Mark Kimmitt says insurgents have so far turned in only a small cache of rusted or spent ammunition and unusable guns.

"These types of weapons are not a serious demonstration that they want peace. A large field full of the heavy weapons that have been used against the people in Fallujah and used against the coalition forces in Fallujah, that's the minimum," he said.

And, a top Marine in Fallujah says it's just a matter or days before forces storm the city, where hundreds of Iraqis have reportedly died in battles with Marines this month.

With U.S. troops stretched thin and U.S. officials disappointed in the performance of newly recruited Iraqi security forces, coalition officials say they are shifting course and will now allow former Iraqi military officers and others who were members of Saddam Hussein's Baath party to go back to their jobs.

"There is going to be a need for high ranking officers. You're going to need generals, you're going to need full colonels, you're going to need senior officers," said General Kimmitt.

A coalition spokesman says qualified Baath party members innocent of Saddam-era crimes will no longer be automatically excluded from work. A year ago, senior Iraqi military officers were cashiered after Defense Secretary Donald Rumsfeld declared they would not be allowed to hold positions of authority. But in the time since, efforts to train Iraqi recruits to serve in the newly constituted police and security forces have proved a disappointment, with some abandoning their jobs during times of unrest, and others joining with insurgents.

At a time when several members of the military coalition are pulling out of Iraq, the on-going violence is also leading some major contractors involved in the country's reconstruction to suspend work. Both General Electric and the German engineering giant Siemens are putting projects on hold because of the insurgency. Affected work includes power plant generators - critical to increasing Iraq's supply of electricity in time for the hot summer. The decision follows the deaths or disappearance of a number of foreign contractors in recent weeks.