Explosions and gunfire erupted outside hotels housing foreigners and journalists in the centre of Baghdad tonight, but there were no immediate reports of casualties.

Insurgents fired rockets in central Baghdad early today, hitting at least one hotel used by Westerners but setting their own van on fire, police said.

SABOTEURS have struck a new blow to Iraq's vital oil industry, cutting exports to a third of their previous level. Oil Minister Thamir Ghadhban confirmed blasts at a pipeline which fed storage tanks at Basra oil terminal in the Gulf.

Dozens of Iraqis today accused Fallujah police of handing over Shiite truck drivers to Sunni extremists who slaughtered them after they sought refuge at a police station.

AMERICAN forces regained control of the southern Iraqi city of Kut seized this week by a rebellious Shi’ite militia as radical Shi’ite cleric Muqtada al-Sadr, warned America they were now fighting an “entire Iraqi nation.”