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The United States lost its 32nd soldier in postwar combat in Iraq on Monday, underscoring the difficulties it faces in quashing resistance as a Governing Council of local leaders began its work.

US Army military policeman directs traffic away from a destroyed car bearing diplomatic licence plates after an explosion in central Baghdad July 14, 2003, just a few hundred metres from the compound housing Iraq's newly formed Governing Council. [Reuters]

The US military is braced for a surge in attacks this week to coincide with anniversaries linked to ousted president Saddam Hussein, his Baath Party and Iraqi nationalism.

A group that said it was an Iraqi branch of the al Qaeda network claimed responsibility for attacks on US soldiers in an audio tape broadcast Sunday but its rhetoric sounded more typical of Saddam supporters than Islamic militants.

A blast damaged an empty parked car used by the Tunisian ambassador Monday afternoon but caused no casualties. Witnesses said drive-by attackers had thrown a small bomb at the car but the US military said the cause was not yet clear.

The explosion happened a few hundred meters away from the compound housing the new Governing Council in Baghdad and close to other buildings used by the US-led occupying authorities.

The 25-member Council, launched on Sunday, decided to send a delegation to the United Nations Security Council and set up three committees to define its priorities and procedures, including who should lead it.

TROOPS UNDER FIRE

In the latest attack on US troops, assailants fired on a convoy in the central al-Mansour area of Baghdad, killing one soldier and wounding 10 others, the military said.

Witnesses said one vehicle was hit by a rocket-propelled grenade and another by machine-gun fire. Bloodstains on an armored Humvee vehicle and the crumpled cab of an army truck bore testament to the attack.

Dozens of US troops searched the area as helicopters hovered above. Soldiers searching an abandoned house in the area found a light machine gun probably used in the attack.

Thirty-two US soldiers have been killed in Iraq since President Bush declared major combat over on May 1.

The growing death toll has intensified pressure on the Bush administration to defend itself against charges that it misled the public by using dubious intelligence to justify the war.

Democrats and even some Republicans in the United States are raising questions about Bush's use of faulty intelligence when he said in his State of the Union speech last winter that Iraq was seeking uranium from Africa in its pursuit of weapons of mass destruction.

But Bush on Monday defended the quality of CIA intelligence as he tried to calm the growing storm. "I think the intelligence I get is darn good intelligence. And the speeches I have given were backed by good intelligence," he said.

The Governing Council in Iraq, which the United States hopes will ease resentment of its occupation after the war that ousted Saddam, got down to business Monday and promptly decided to make its mark on the world stage.

"The Council... decided to send a delegation to the U.N. Security Council to strengthen and consolidate the Governing Council's role as the legitimate Iraqi authority during this transitional period," it said in a statement.

The Council can nominate ministers, review laws and approve budgets but Iraq's US-led administration remains the ultimate authority. To be followed later by a new constitution and free elections, the body is seen as a first step toward democracy.

It could elect a single chairman or choose to have its presidency rotate among representatives of Iraq's various religious and ethnic groups, political sources said.

SADDAM SUPPORTERS BLAMED

US officers largely blame die-hard Saddam loyalists for attacks on their soldiers, but many ordinary Iraqis have expressed frustration at what they say has been the slow pace of returning government to Iraqis and rebuilding the country.

Iraqis cooperating with the occupying powers have also been attacked.

Assailants fired rocket-propelled grenades at a police station in the northern city of Mosul Monday, wounding three members of the new US-backed Iraqi police, residents said.

US troops launched their fourth major crackdown on resistance fighters at the weekend. They detained 226 people, confiscated 800 mortar rounds, 50 machine guns and other weapons in 27 raids, the military said in a statement.

"Six of the detainees are former regime loyalist leaders," the statement said, without naming them.

The operation aims to prevent attacks inspired by three anniversaries. July 14 was the date of a 1958 coup against the British-backed monarchy, Saddam took power on July 16, 1979, and the Baath Party staged a revolution on July 17, 1968.

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