FIERCE fighting in the Sunni stronghold of Fallujah yesterday killed one American soldier and eight insurgents, casting doubt on a deal Americans had hoped would end one of their biggest problems in Iraq.

Suicide boat bombings targeting Iraq’s key oil industry in the Gulf forced the closure of two major terminals in the Gulf for several hours, but the facilities resumed work loading tankers today, Iraq’s top oil marketing official said.

Iraq has re-entered the world oil market with its first shipment of crude since the war, but sabotage and looting along its largest pipeline delayed the flow of freshly pumped oil – the key to the reconstruction of an economy devastated by sanctions and war.

CRUDE oil rose for the third time in four sessions as war in Iraq and civil strife in Nigeria limit shipments from the countries, which normally produce about 6% of the world’s oil.

US AND British forces yesterday tightened their grip on Iraq’s southern oil region and began assessing how to restart exports from fields holding more than half the country’s oil wealth.