Gunmen assassinated an Iranian diplomat in Baghdad just as Iran, with tacit US approval, attempted to mediate with radical Shiite cleric Muqtada al-Sadr defying American forces in the southern Iraqi city of Najaf.

Despite the deaths of 12 US Marines in Iraq yesterday, President Bush declared that the US resolve in Iraq remained "unshakable".

Iraqi militants and rebellious Shiites challenged the US-led occupation force on two fronts today, mounting a string of attacks across the south that left dozens of people dead.