NAJAF, Iraq, Aug 10 (AFP) - For the fifth straight day Monday US marines battled followers of Shiite Muslim radical leader Moqtada Sadr in this ancient Shiite holy city, as threats against Iraq's southern oilfields sent world prices to a record high.
"I will defend Najaf until my last drop of blood," the fiery cleric vowed from the Imam Ali shrine, as mortar and machine-gun fire rocked the central holy city.
"I am an enemy of America and America is my enemy until the day of the last judgement," he said, rejecting calls by interim Prime Minister Iyad Allawi for his men to lay down their arms and leave the city.
Helicopters, warplanes, tanks and artillery battered Najaf, where Sadr's Mehdi Army hunkered down in the vast cemetery and around the city-centre shrine. The site has been a militia stronghold since the spring uprising against foreign troops.
Sadr aide Asaad al-Basri threatened attacks against key oil infrastructure, prompting an official with the state-owned Southern Oil Company to announce a halt in crude pumping "for security reasons."
The southern oilfields are the only source of crude Iraqi exports since an attack on a pipeline artery to Turkey limited deliveries from the main northern oilfields last week.
The halt sent New York crude to an all-time high.
Light sweet crude for delivery in September surged 1.02 dollars to 44.97 dollars a barrel early afternoon, thundering past the previous record, set Friday, of 44.77 dollars.
A senior US official said the marines had been given permission to enter the Imam Ali shrine -- one of Shiite Islam's holiest -- to attack the militants. "But we have not done it as of now," the spokesman said.
"We respect the shrine and any action taken will be on the order and direction of the governor," he added.
In Amman, officials and family announced that two Jordanian truck drivers kidnapped in Iraq last month were freed and were being looked after by embassy officials in Baghdad.
"They were freed thanks to mediators," said a Jordanian official, without elaborating.
Their company, Daoud and Partners, later announced it was acceding to the kidnappers' demand to halt activities in Iraq.
And one of four Lebanese truck drivers, Qassem Merqbawi, kidnapped Friday on the road west from Baghdad was released on Monday, his wife told AFP.
"I received a phone call an hour and a half ago from my husband, who told me he had been released," Nada Sayyur said.
She added that she had received a separate telephone call from Iraq informing her that both her husband and one of his colleagues, Nasser al-Jundi, had been set free. The Jundi family said they had no details about the release.
In the main southern city of Basra, a British soldier was killed during clashes with insurgents, the defence ministry announced in London.
In Washington, President George W. Bush said it appears "that we're making pretty good progress about stabilizing Najaf."
Interim Iraqi Prime Minister Iyad Allawi "is now in charge of the country," he said. "And if he's got some suggestions to make, we're more than willing to listen to him," Bush added.
Bush made the remarks at a White House appearance with visiting Polish Prime Minister Marek Belka, who dismissed poll numbers showing that 73 percent of Poles do not want their troops to stay in Iraq.
"No one wants to stay in Iraq forever," he said. "It's a sovereign country."
Belka emphasized that military presence in Iraq is "not a typical military operation," but rather "a stabilization in all senses of this word."
Poland currently heads a 6,500-strong multinational force in the country, including 2,500 of its own troops.
According to the survey from the CBOS institute published on Thursday, 67 percent of the Poles asked between July 9-12 said they wanted their troops pulled out of Iraq as soon as possible.
Also in Washington, US State Department officials struggled to reconcile its normal forceful advocacy of international press freedom with a defense of the Iraqi interim government decision to close the offices of the pan-Arab Al-Jazeera television network in Baghdad.
"I'm not comfortable giving you a judgment call on it," deputy spokesman Adam Ereli said, refusing to criticize Saturday's move.
"This was an Iraqi decision," he said. "We had nothing to do with it."
"Obviously, we are supportive of a free and independent media," Ereli said, adding that despite the 30-day closure of the Al-Jazeera offices, the Iraqi government had been supportive and tolerant of press freedom.
On Monday, the Brussels-based International Federation of Journalists (IFJ) condemned the closure as an act of "unacceptable and illogical censorship that casts a shadow over hopes for a new era of press freedom".
Paris-based Reporters Without Borders (RSF) earlier demanded "an immediate explanation" for the move, saying it was "extremely concerned about persistent episodes of censorship in Iraq."
Al-Jazeera has frequently been accused by US and Iraqi authorities of inciting violence by screening "exclusive" video tapes from Muslim extremists, including al-Qaeda terror network mastermind Osama bin Laden.