An Arab terrorist who killed an American after hijacking a cruise liner has been captured in Baghdad, US officials have revealed.

US Marines battled snipers outside a hotel in central Baghdad today, while calm appeared to return to other parts of the Iraqi capital.

LOOTERS in Baghdad set their sights yesterday on the symbols of Saddam Hussein’s dying regime, swarming a palace overlooking the Tigris River to nab bone china with the Iraqi eagle insignia, fancy wash basins and bath tubs — even fish from the garden pond.