Developments in Iraq

Major developments Monday in Iraq:

An explosion leveled part of a Baghdad building as U.S. troops were searching it for suspicious chemicals, killing two soldiers and wounding five, the military said. Iraqis looted Humvees wrecked in the blast, making off with weapons, a helmet and a bandolier.

In Fallujah, U.S. troops came under a heavy insurgent attack a day after U.S. officials decided to extend a cease-fire rather than launch a full-scale offensive on the city. One Marine and eight insurgents were killed.

Shiite militiamen outside the holy city of Najaf fired rocket-propelled grenades on a U.S. position, witnesses said. Apache helicopters and U.S. troops opened fire and set the cars on fire.

An Arab TV channel showed a video of what it said were three Italian hostages and said their captors, an Iraqi armed group called the ''Green Brigade,'' were threatening to kill them. The private security guards were reported kidnapped this month in Baghdad.

About 200 U.S. troops rolled into a base in the Shiite holy city of Najaf to replace Spanish forces who are withdrawing. The deployment brings the Americans about three miles from holy sites at the heart of the city.

The president of Iraq's U.S.-picked Governing Council, Massoud Barzani, told AP that American mistakes helped lead to the military deadlock outside Najaf and Fallujah. He said an Iraqi interim government should have been quickly set up after the war and Iraq's army should have been reformed rather than disbanded.

Iraq's U.S.-picked leaders approved a new flag for the country, radicially different from the red-and-black standard under Saddam Hussein. The new flag is white, with two parallel blue stripes across the bottom and a yellow stripe between them. Above the stripes is a blue crescent signifying Islam.

Iraq resumed petroleum exports two days after suicide bombers in boats attacked Iraqi oil facilities in the Gulf, the oil ministry said.

Insurgents in Karbala fired at Bulgarian President Georgi Parvanov's motorcade on Sunday during his brief visit to Iraq, but no one was hurt, officials said. The president's security detail fired back, and the attackers fled.

Three Japanese held hostage in Iraq were billed about $7,000 each to cover their plane tickets home and other expenses, a foreign ministry official said. The three have been widely criticized for going to Iraq despite goverment warnings not to.

Secretary of State Colin Powell spoke with Danish officials on how a U.N. resolution could be used to expand peacekeeping forces in Iraq and ensure an interim Iraqi government approves their presence.

From: http://www.boston.com/dailynews/117/world/Developments_in_Iraq_:.shtml