SAMARRA, Iraq, Oct 2 (AFP) - US and Iraqi officials said the rebel city of Samarra was largely under control on Saturday after one of their largest post-war military offensives in Iraq, while US warplanes rocked the rebel town of Fallujah, another hotspot area, for a second time in 24 hours.
Hopelessly outweighed militarily, an increasingly violent insurgency played once again its hostage card, with one group threatening to kill a Jordanian captive in 72 hours and another beheading an Iraqi who "confessed" to being a contractor with US forces.
As the inhabitants of Samarra picked up the pieces after the two-day operation, Interior Minister Falah al-Naqib told reporters: "We cleaned up the city from all the bad guys and terrorists."
Speaking inside the city hall in Samarra, Naqib described the mission as the most successful to date, and hinted at further action to wrest control of other no-go areas from rebels.
Asked if Fallujah, a Sunni Arab enclave west of Baghdad, would be next on the list, the minister said: "I would like to say today rather than tomorrow ... we would be able to do that.
"Fallujah has to come back to Iraq ... we want all Iraqis to participate in the elections."
On Friday, a massive force of 3,000 US troops and 2,000 Iraqi auxiliaries stormed Samarra, a key bastion in the Sunni insurgent belt north of Baghdad in the first major push to reclaim insurgent-controlled areas in the run-up to January elections.
The US military said 109 rebels and one US soldier were killed, while local hospitals reported 90 dead and 180 wounded on Friday.
Sporadic explosions were still heard in the afternoon Saturday, but the bulk of the fighting appeared to be over, AFP correspondents on the ground said, adding that most of the city was deprived of water and electricity.
In a further crackdown on rebel activity elsewhere on Saturday, US warplanes bombed a building on the outskirts of the rebel-held town of Fallujah, targeting what the US military said were 15 to 20 insurgents suspected of links to Islamic militant Abu Musab al-Zarqawi.
The army gave no indication of the casualty toll from its latest air raid and insisted their operation had been a success. There was no immediate way of verifying its claims.
Overnight, US forces carried out another of its almost daily strikes on the Fallujah area, killing at least seven people and wounding 13, the city`s hospital said.
A doctor there said women and children were among the victims of the raid but the US military insisted it was a "precision" strike.
The military also reported a US soldier was killed in the Baghdad area overnight but provided no details. Five US soldiers were wounded on Saturday in bomb attacks outside Fallujah, in the northern city of Mosul and in Baghdad`s radical Shiite stronghold of Sadr City.
Unable to respond directly to the military might of the coalition, insurgents have increasingly resorted to hostage-taking in recent months to wreak chaos in Iraq and eclipse progress by the interim Iraqi government.
In the unfolding drama, militants paraded a Jordanian hostage, Hisham Taleb al-Ezza, in a videotape aired by Al-Arabiya television with a threat to kill him in 72 hours if his employer fails to halt its Iraq operations.
The firm responded almost immediately by announcing it ceased all its activities in the war-torn country.
Raising the stakes, another militant group posted a video on its website showing an Iraqi man being beheaded after "confessing" he was a contractor with US forces.
Another band of hostage-takers, which has detained two French reporters for six weeks, demanded in a video broadcast by Al-Jazeera television that Jakarta release Abu Bakar Bashir -- a cleric suspected of links with Al-Qaeda -- in exchange for two Indonesian women it kidnapped.
Separately, it demanded that Beirut withdraw all Lebanese nationals from Iraq.
According to a previous video, the two Indonesians, identified in Jakarta as Rosidah binti Anom and Rafikan binti Amin, were among a group of 10 hostages which included two Lebanese and six Iraqis. All work for a British electronics company contracted by the coalition forces.
Indonesian President Megawati Sukarnoputri, who leads the world`s most populous Muslim country which has been a consistent critic of the US-led invasion of Iraq, appealed for the release of the women.
Meanwhile, the fate of two French reporters captured six weeks ago by the same group remained shrouded in mystery after a failed mercy mission led by a maverick French MP.
Away from the bloodshed and terror, the world`s seven leading industrialized countries have vowed to reduce Iraq`s 120-billion-dollar (100-billion-euro) debt by the end of the year but remained divided Saturday on the scope of the cut.
"We made progress on the Iraqi debt," French Finance Minister Nicolas Sarkozy said a day after the Group of Seven -- Britain, Canada, France, Germany, Italy, Japan and the United States -- made clear its commitment following a meeting in Washington to ease Iraq`s debt burden by January.