BAGHDAD (AFP) - US troops found three bodies and their severed heads north of Baghdad while 13 people died in clashes in Ramadi, two more in a car bomb attack and two Iraqis employed by the US Army were shot in the north.

More than 350 people have been killed so far this month alone, spurring the US authorities to switch more than three billion dollars into boosting security at the expense of earmarked reconstruction projects.

The headless, decomposing corpses, thought to be of Iraqi civilians, were discovered on a roadside with inscriptions carved into them, before their remains were put in bags and taken to Balad, police and the US military said.

Authorities believe they had been dead for about five days.

Further north, gunmen shot dead two Iraqi builders employed by the US military, not far from the northern oil capital of Kirkuk, police said.

Just south of Baghdad, in the Sunni Muslim insurgent bastion of As-Suwayrah, an Iraqi national guardsman and civilian were killed and 10 people wounded in a car bomb attack, the interior ministry said.

Another bomb in Baquba, north of Baghdad wounded four policemen and a civilian, according to police and a local doctor.

On Tuesday, a massive car bomb outside the main Baghdad police headquarters killed 47 people, while 12 police and their driver were shot dead in Baquba -- the latest insurgent attacks on the US-sponsored Iraqi security forces.

Both assaults were claimed in the name of the Tawhid wal Jihad (Unity and Holy War) group of alleged al-Qaeda operative Abu Mussab al-Zarqawi.

The health ministry said 13 people were killed and 17 wounded in fresh violence in the western city of Ramadi, where exchanges of fire pitted gunmen against US marines for the second consecutive day.

Determined that elections will take place as planned next January but worried by daily killings, car bombings and hostage-taking, Washington has transferred 3.46 billion dollars to Iraqi security instead of reconstruction.

The decision to divert 3.46 billion dollars from medium- and long-range reconstruction programmes to short-term security projects and economic development was based on a comprehensive review of spending under the Iraq Relief and Reconstruction Fund.

Barely any of the 18.4 billion dollar fund, approved by Congress and signed into law by President George W. Bush in November 2003, has been spent amid the kidnappings and killings in Iraq.

On a visit to Iraq, Britain`s top general Sir Mike Jackson, told the BBC that the coalition was pretty confident the polls would take place on time.

In a bid to break the resistance, the Iraqi government and its US backers this month launched the biggest counter-insurgency operations since the spring.

US forces have relentlessly pounded alleged Zarqawi safehouses in the insurgent enclave of Fallujah, west of Baghdad, causing scores of casualties.

Troops also sealed off the northern town of Tall Afar, which the military suspects of being a staging post for infiltrators from Syria, for five days.

"According to the latest count, 56 people have been killed and 157 wounded in clashes in recent days," Doctor Fawuzi Ahmed, director of Tall Afar hospital, told AFP on Wednesday.

"Most are women and children. Some police have also been killed or wounded but there were no foreigners among the victims," he said.

Washington`s ally Turkey warned that it would halt all cooperation in Iraq if the mainly ethnic Turkmen town continued to be a target. The blockade was lifted on Tuesday.

Iraq`s foreign hostage crisis, meanwhile, continued as militants claimed two separate kidnappings of a Jordanian and of two Turkish truck drivers.

A group calling itself "Squads of Unification Lions" paraded the captive Jordanian and threatened to kill him unless his employer pulled out of Iraq within 48 hours, in a video aired on Al-Jazeera television.

Abu al-Shih haulage company boss Ibrahim al-Zohbi said he had halted Iraq operations in a bid to save truck-driver Turki al-Breizat`s life.

The Islamic Army of Iraq, which is holding two French journalists hostage, has branded France as an "enemy of Muslims," on a website.

But a Turkish interpreter taken hostage in July has been released by his armed kidnappers and will soon return home, a Turkish diplomat said Wednesday.

Like the French, the fate of two Italian women aid workers, Simona Pari and Simona Torretta, both 29, seized in Baghdad on September 7 remained unknown as Italian President Carlo Azeglio Ciampi made a fresh appeal for their release.

In the north, repairs were under way on a power plant and the vital oil export pipeline to Turkey, following the latest in a spate of sabotage against Iraq`s energy infrastructure.

The attacks halted all deliveries through Turkey, but the Baiji generator was expected to resume electricity production later Wednesday, officials said.