Five people were killed when a car bomb exploded in front of the home of a senior Iraqi security official in east Baghdad today, the US military and Iraqi police said.

IRAQ’S most influential Shi’ite cleric yesterday demanded that all armed groups withdraw from the embattled holy cities of Najaf and Karbala, where nine militiamen loyal to a rebel cleric were killed in heavy fighting with US forces.

The US governor of Iraq said today that the transfer of sovereignty to Iraqis must go ahead as scheduled despite the killing of the head of the US-appointed Iraqi Governing Council in a suicide bombing.

THE head of the Iraqi Governing Council was assassinated in a suicide car bombing near a checkpoint outside the coalition headquarters in central Baghdad yesterday.

Wall Street, already beset by worries about the economy and world events, skidded even lower today on news that the head of Iraq’s governing council had been assassinated. The Dow fell more than 100 points.

British Prime Minister Tony Blair today insisted that the transfer of sovereignty in Iraq would go ahead as planned, despite the killing of the head of the country’s governing council.

Oil prices are set to climb to fresh highs today in the wake of the killing of a senior Iraqi government leader.

British Foreign Secretary Jack Straw said today the killing of the head of the Iraqi Governing Council should not deter the transfer of power from US-led coalition forces next month.

The head of Iraqi Governing Council was killed today in a car bombing near a US checkpoint in central Baghdad, an Iraqi official said.