US tanks blast into central Baghdad, Iraq defiant

9.00pm

UPDATED REPORT - US forces burst into the heart of Baghdad today and entered two palace complexes of President Saddam Hussein, but they said the operation was an armored raid not intended to hold territory.

Iraq said the invaders were "committing suicide" on the gates of the capital.

"We have seized the main presidential palace in downtown Baghdad...There are two palaces down there and we are in both of them," Lieutenant Colonel Pete Bayer told Reuters reporter Luke Baker, with the US 3rd Infantry Division near the airport.

Reuters reporter Khaled Oweis said Iraqi forces were blocking many Tigris bridges. Republican Guards were defending key ministries with rocket-propelled grenades.

"Baghdad is safe," Information Minister Mohammed Saeed al-Sahaf told reporters at the central Palestine hotel as a dense yellow sandstorm swept in over the city.

US columns had been "slaughtered," he said. "The battle is still going on. Their infidels are committing suicide by the hundreds on the gates of Baghdad."

He was speaking within sight of US tanks on the other side of the Tigris river. Earlier, two US tanks could be seen going into a palace on the west bank of the Tigris as Iraqi troops fought back. Shells crashed into the compound, sending up plumes of white smoke.

There was no word on Saddam's whereabouts. He was unlikely to be anywhere near his official palaces, which have already been heavily bombed in nearly three weeks of air strikes.

With A-10 "tankbuster" planes and a pilotless reconnaissance drone prowling smoke-wreathed skies, tanks and armored vehicles blasted their way into the city center after daybreak.

World stocks and the dollar surged while safe-haven gold and government bonds plunged on news of the US assault. Oil prices skidded lower in expectation that a rapid end to the war would increase supplies of Gulf crude on the world market.

"This is an armored raid through the city. We should stay calm," US spokesman Captain Frank Thorp told Reuters. "There's a lot of tough battles ahead. This is yet another step in the coalition's effort to bring down the regime."

A Pentagon official said the attack was a "show of force" but it would be "hyperbole" to call it the battle for Baghdad.

"This was a show of force, an operation designed to demonstrate US resolve that involves increased visibility of US forces," he said. "It sends a powerful message to the regime that we can go wherever we want when we want."

He said the United States had "significant forces" in the Baghdad area. "It can't be anything less than extremely alarming to the regime that an American commander is at the presidential palace in Baghdad," he said. "We have the initiative here."

A British military spokesman said the US demonstration of muscle should encourage Saddam's government to give up.

"I would urge the regime if they are watching this, capitulate now. Let's save any further loss of life," Captain Al Lockword said on Sky Television.

Lockwood told Reuters that Saddam had lost control of his forces. "We know Saddam Hussein's command and control is destroyed. We know he can't control his forces. We know he has no significant forces left. There's no way of coordinating and getting them to fight a battle in the traditional military manner."

No reports of US casualties

Bayer said 65 tanks and 40 Bradley fighting vehicles had taken part in the "highly successful" attack. "What we are trying to gauge is what his (Saddam's) response is."

He had no reports of American casualties and said US forces were now probing Baghdad's northwest districts.

Iraqi state television remained on the air, broadcasting old footage of Saddam and patriotic songs.

Bayer said US forces were near the Information Ministry and the central Rashid Hotel but had not taken them. Oweis said both the Information and Foreign Ministries were in Iraqi hands.

A military source told Baker that US forces had no plans to take either building for the moment.

Black smoke billowed from two oil-filled trenches in central Baghdad, apparently lit as a smokescreen to confuse attackers. Such trenches have often been used in the outskirts of the city, but it was the first time they had been ignited in the center.

At least five burned-out cars and buses littered streets in the center of Baghdad.

US forces have tightened their noose around Baghdad since capturing the international airport southwest of the capital on Friday and seizing control of most of the highways leading in and out of the sprawling city of five million people.

In the south, British forces were in control of most of Iraq's second city, Basra, on Monday but continued to face some resistance, British spokesman Lockwood said.

"We now control the majority of the city. There are pockets of resistance in the old area," he said. He confirmed that three British soldiers had been killed in the fighting.

On Sunday, Major General Peter Wall, deputy commander of British forces in Iraq, said troops would soon go on foot into parts of the old city where streets are too narrow for tanks.

British forces blasted their way into Basra to root out paramilitary Saddam loyalists on Sunday after a two-week siege.

US troops said on Monday they had taken control of the Shi'ite Muslim shrine city of Kerbala, 70 miles southeast of Baghdad, after fierce battles with Iraqi paramilitaries threatening US supply lines.

With the war in the heart of Baghdad, the issue of how Iraq will be run in a post-Saddam era loomed increasingly large.

President Bush, who launched the war to oust Saddam and rid Iraq of weapons of mass destruction, was due to meet key ally British Prime Minister Tony Blair later on Monday to discuss a possible UN role in the new Iraq.

Iraq denies possessing any banned weapons and invasion forces have yet to find any.

US officials have ruled out a key political mission for the United Nations, saying Washington and its allies earned that right by giving "life and blood" on the battlefield.

Blair and other European leaders want the UN Security Council to endorse the post-war process.

US Deputy Defence Secretary Paul Wolfowitz said on Sunday it would take more than six months for an Iraqi government to be created to run the country after Saddam had been defeated.

- REUTERS

Herald Feature: Iraq war