US accused of killing women and children in attack on al-Qaeda

However, local officials claimed 32 people were killed when US aircraft bombed two houses, and said seven women and eight children were among the dead.

A US military spokesman said ground forces were searching buildings when they were attacked near Lake Thar Thar in the predominantly Sunni Salahuddin province.

They returned fire, killing two insurgents and the troops then called in air support, killing 18 insurgents, the spokesman said, adding that two women were among those killed.

"Al-Qaeda in Iraq has both men and women supporting and facilitating their operations," the military said.

Searching the area, the coalition forces found and destroyed several weapons caches, including AK-47s, machine guns, rocket-propelled grenades, anti-personnel mines, explosives, blasting caps and suicide vests.

The raid was conducted in an area where intelligence reports had indicated that "associates with links to multiple al-Qaeda in Iraq networks were operating," US command said.

However, Amer Alwan, the mayor of the Ishaqi district near Lake Thar Thar, said 32 people, mostly women and children, had been killed when US aircraft bombed houses.

Television news footage showed more than a dozen charred and bloody bodies laid out and covered in wool blankets amid concrete rubble left by the devastated houses.

Earlier this year, a US military investigation cleared American soldiers of misconduct in a raid on a village during which they had Air Force planes destroy a building where they believed al-Qaeda insurgents were hiding. Villagers claimed the soldiers intentionally killed 11 Iraqi civilians before the air strike.

Kofi Annan, the United Nations secretary general, warned yesterday that soaring violence in Iraq made a Middle East regional war a growing possibility.

"High levels of civilian casualties and displacement on a daily basis are breeding an increasing sense of insecurity and deep pessimism among Iraqis," Mr Annan said.

"The prospects of all-out civil war and even a regional conflict have become much more real. The challenge is not only to contain and defuse the current violence but also to prevent escalation."

Meanwhile in the south, troops from the Black Watch battalion of the Royal Regiment of Scotland played a leading role in an operation involving some 1,000 UK and Danish troops, which led to the capture of five suspected terrorists.

A coalition spokesman said the arrested men were members of "a rogue, breakaway element" of one of the many Shiite militias in the area.

Major Ben Wrench of the Black Watch, who led the operation, said: "Our Danish allies have their own restrictions on their remit in Iraq which means that the Black Watch are used at the forefront of offensive operations like these.

"We suspect the main target, who was arrested today, is the leader of a criminal gang that has also been involved in a lot of kidnapping, murders and hijacking aimed at the Iraqi population.

"All five suspects are now going through due process and it is our hope that the streets of Basra will be a little bit safer tonight."