FALLUJAH, Iraq, (AFP) - Two British soldiers were killed during an ambush on a convoy near the southern Iraqi city of Basra, the ministry of defence in London said, as US aircraft launched strikes on Fallujah which local medics said killed three people although the US military denied any casualties.
A ministry spokesman said a convoy of three vehicles was ambushed southwest of Basra, damaging one armored Land Rover.
While trying to evacuate the casualties, they came under fire and the two soldiers were killed, he said.
In Fallujah the US military launched two rounds of strikes on a northern neighbourhood, according to residents and an AFP correspondent in the city, but the military only confirmed one operation at about 4:00 am (midnight GMT).
"Three people were killed and six others wounded," said Dr Rafaa Hiad at the city`s main hospital.
The US military said the raids were against suspected hideouts of fighters loyal to Islamic militant Abu Mussab al-Zarqawi, the most wanted man in Iraq who is responsible for scores of deadly anti-coalition attacks and kidnappings.
But US army spokesman Jay Antonelli denied the strike had caused any casualties.
"We dropped two munitions north of Fallujah. The strike, which targeted elements of Zarqawi`s terrorist network... missed its target and hit an open area, causing no collateral damages and hitting no buildings or vehicles," he told AFP.
The US military has been pounding the insurgent enclave relentlessly in recent days launching two raids on Saturday on what it said were a suspected hideout and meeting place of the Zarqawi network.
Medics said at least 15 people were killed and 33 wounded in Saturday`s raids.
The military says the strikes have eliminated scores of Zarqawi`s followers and disrupted his network, but doctors at Fallujah`s hospitals claim that many of the victims of the raids are women and children.
"We don`t target innocent civilians but there`s always a chance the Zarqawi network or other criminal elements use facilities or weapons storage sites that are in close proximity to Iraqi people," a senior US military official said recently.
The military has increasingly been casting doubt on medical reports coming from Fallujah following strikes.
The area is a theocratic enclave virtually inaccessible to foreign reporters and death tolls provided by one side or the other cannot be verified independently.
Elsewhere a succession of explosions resembling cannon or mortar fire rattled central Baghdad`s Haifa street district on Tuesday, the site of frequent clashes between US forces and insurgents.
Smoke rose up from the western end of Haifa street and the boulevard was closed to traffic, while two US helicopters flew overhead.
The neighbourhood -- with its high-rise apartment buildings -- provides an ideal terrain for insurgents to carry out hit-and-run attacks on convoys or fire mortar shells on the nearby Green Zone, a fortified compound which houses the nation`s key institutions.
Also Tuesday Italy`s leading newspaper Corriere della Sera reported that two Italian female aid workers held in Iraq could be released in coming days once a one-million-dollar ransom has been paid to their kidnappers.
The paper, citing a report in a Kuwaiti newspaper, said half of the ransom money had already been paid and the other half million could be handed over on Tuesday or Wednesday.
"The two Italian prisoners will soon be freed following an accord with their kidnappers," the publisher of the Kuwaiti daily Al-Rai al-Aam was quoted as telling Corriere. "Half a million dollars has already been paid for their release."
The publisher Ali al-Roz at the weekend had also reported that the two women, Simona Torretta and Simona Pari, were still alive despite two Islamic Internet sites claiming they had been executed.
He told Corriere that the conditions for their release were no longer "political but economic".
The daily La Repubblica headlined "Hour of truth for the hostages" on its front page and added that there was reason to hope again that the two women would be freed.
Italy has been on tenterhooks over the fate of Torretta and Pari, both aged 29, who were seized, along with two Iraqi colleagues, on September 7 from the offices of the aid organization they worked for in Baghdad.
Two communiques published on Islamist websites had announced the aid workers had been killed last week, but Italian authorities said the reports were not deemed credible.
Corriere also reported Tuesday that US intelligence had managed to intercept in a telephone conversation what may be the voice of one of the hostages.
It said American officials had notified Rome that their intelligence services had come upon a telephone conversation in which "the voice of a western woman is heard saying a few words in the background".
After analyzing the recording, specialists have determined "that the voice heard could be that of one of the two women".
Corriere said the phone conversation was intercepted a few days ago but did not elaborate.