Carnage, courage and the spectre of chemical weapons

The speed and audacity that has characterised the American advance across Iraq reached new levels yesterday with a series of daring thrusts into the heart of Baghdad and into Saddam Hussein's presidential palaces.

But Day 19 was also a day that seemed to pull together many other salient themes of the Anglo-American campaign – from the courage and canniness of the British forces, to the spectre of chemical weapons, the agitation in wider Muslim circles and the continuing fault-lines in international diplomacy. And each new solution seemed to expose a new problem.

At dawn 65 Abrams tanks and 40 Bradley armoured vehicles, supported by A-10 "tankbuster" aircraft, bore swiftly down upon the centre of Baghdad. Troops of the US 3rd Infantry Division approached from their base at Baghdad international airport, formerly Saddam international. They came, in a pincer, by two routes from the south-west and seized two of Saddam Hussein's central palaces, including the main Republican Palace complex. At the same time US Marines advanced on the capital from the south-east and moved towards bridges across the Tigris river, which divides the city.

They advanced under cover of an aerial bombardment of both the centre and the outskirts of Baghdad. US troops reported only "sporadic resistance" and the assault was visible to journalists on the Iraqi side of the lines. Defenders were filmed – from the foreign press corps' hotel just across the Tigris – running away along the riverbank.

Troops entering one palace found it was defended by only seven Syrians, one of whom they found cowering inside a fridge. Within an hour, a US army colonel was giving an interview outside one of the palaces, announcing that US forces had control of the centre of the city and the heart of the Iraqi government. It sent the message that the Allies "can go where we want, when we want".

It was a message to which the febrile traders of the stock market, at any rate, responded. Television pictures of the tanks brought a 138-point rise in the FTSE 100 index and a drop in oil prices – both to almost the same point they were when the war first started. There was a surge in US stock markets when they opened too, perhaps spurred by the pictures from inside Saddam Hussein's main palace, with its wide spiral staircase and gargantuan chandelier. These were beamed from US military videophones to news outlets. Troops even posed for propaganda shots as they relaxed amid the blooms of the Iraqi president's gardens.

But the bizarre propaganda war was far from one sided. With gunfire still ringing in his ears, the Iraqi Information Minister, Mohammed Saeed al-Sahaf, strode boldly onto the roof of the journalists' Rashid Hotel to announce: "Don't believe these invaders and these liars. There are none of their troops in Baghdad." American armoured columns had been "slaughtered" and forced out of the city, he laughed, in a performance of extraordinary bravura considering he was within a few hundred metres of the US tanks.

Yet the evidence was that the Allied incursion was limited. Reporters in Baghdad said the Iraqi Information and Foreign Ministries remained in government hands, with heavily armed units of the Iraqi Republican Guard around them. Angry, aggressive Fedayeen were stationed at roadblocks around the city and were protecting bridges with rocket-propelled grenades, their morale boosted by a promise issued overnight, in President Saddam's name, of $8,000 (£5,100) to anyone destroying an Allied tank, armoured personnel carrier or artillery piece.

But what struck correspondents was the striking absence of the Iraqi regular army, combined with the continuing nonchalance of the population, with people queuing for bread, drinking tea and eating kebabs as the gunfire echoed.

There were dawn operations in Basra too. British paratroops stormed on foot into the Old City, which is thought to be the final hideout of Iraqi militiamen. The wider roads of the new parts of Basra were occupied by more than 90 Challenger tanks and 80 Warrior armoured vehicles as the British 7th Armoured Brigade began the final assault on Iraq's second city. The cautious "bite-and-hold" tactics of the past week gave way to a final push from the west and the north after SAS soldiers discovered the location of the headquarters of the Iraqi military leadership on Saturday morning and called US warplanes to destroy it.

It proved the turning point. In the building, it is now believed, was Ali Hassan al-Majid – the man known as "Chemical Ali" for his gassing of Kurds in Halabja, and who was said to have been responsible for killing up to 300,000 in a reign of terror that included invading Kuwait and suppressing the Kurdish and Shia uprisings that followed the 1991 Gulf War. British commanders are convinced that he died in that raid, though there was still no confirmation yesterday that the body found was his. Which perhaps explains the mood the British troops found in Basra. Minimal resistance was shown but nor were there mass scenes of jubilation. The streets were "eerily quiet".

Just outside the city, Royal Marines took another presidential palace. Saddam Hussein's summer retreat overlooking the Shatt-al-Arab waterway was another lavish affair of opulent marble inlays, intricate tilework, rich stained-glass, gold-leaf veneers and heavy hand-carved doors – of which a British armoured car made short work yesterday.

It was not a day without cost for the Allies. At least two, and possible eight, US Marines were killed in the skirmishes for the Tigris bridges, which were badly damaged in the fighting. The Americans later secured the bridges and crossed with tanks and armoured vehicles to engage Special Republican Guard units on the Baghdad side of the river. In a separate incident east of the city, two marines were killed in another "friendly fire" incident when a short-falling US artillery shell punched into their armoured vehicle. To the south, two US soldiers and two journalists were killed in an Iraqi rocket attack on a US 3rd Infantry communications centre.

As the day progressed, news came in from other fronts. The encirclement of the regime tightened from the north too. Heavy air strikes pummelled the area around the city of Mosul. US special forces with Kurdish soldiers – despite unexpectedly heavy resistance – occupied swaths of territory running along the former frontline, pushing towards the region's oilfields until they were only three miles from the strategic town of Kirkuk. US Central Command said American forces destroyed a column of Iraqi tanks and artillery to the north-west of Baghdad, preventing reinforcement of those defending the city.

There were also mysterious reports, out of Qatar, of Allied special forces carrying out "unconventional warfare" in southern, northern and central Iraq, but no details were forthcoming.

As the day wore on, the focus shifted from the battlefield to the political arena. The US military began airlifting hundreds of members of the opposition group, the Iraqi National Congress, and its controversial leader, Ahmed Chalabi, into the southern Iraqi town of Nasiriyah. American officials described the group as the nucleus of "the new Iraqi army". The lightly armed group – the advance guard of what was being called the Free Iraqi Forces – will, it was said, help with humanitarian work and act as a liaison between US forces and the local population. But few doubted that this was primarily a political move by the Pentagon to boost the credibility of one its main allies within the Iraqi opposition.

At lunchtime, George Bush took off from Washington to fly to Belfast for his war summit with Tony Blair. Shortly afterwards, the Secretary of State for Defence, Geoff Hoon, speaking in the House of Commons, gave a hint of what may turn out to be a major plank in the Bush-Blair meeting. Asked about any finds of chemical weapons, Mr Hoon said that some "interesting finds" of chemical agents were being investigated.

It seemed a muted response in the light of a statement by Major Michael Hamlet, of the US 101st Airborne Division, who told Reuters in Iraq that initial tests on substances found at a military training camp near Karbala revealed the nerve agents sarin and tabun and the blister agent lewisite. There were reports also of CN, a riot-control gas that causes vomiting and blisters; and mustard gas, a blister agent that burns exposed skin, eyes and lungs. Further tests on the substances found at the camp are being carried out by the 51st Chemical Company. The results are expected today.

"This could be the smoking gun," Major Hamlet said. If so it would be convenient timing for the concluding press conference statement by the US and UK leaders.

There was certainly some fortuitous timing from the Iraqi leader yesterday. In the afternoon, Iraqi state television showed President Saddam and his son Qusay meeting top aides. As ever, it was unclear when it was filmed – though Mr Hoon gave a hint that perhaps he knew more than he was letting on with his cryptic remark: "We are still not sure of the location of either Saddam Hussein or his sons – there are reports beginning to come in as to the whereabouts of some of those three."

A Saudi newspaper, Al-Watan, tried to pierce the fog a little. It claimed yesterday that it was not President Saddam who made the filmed walkabout in Baghdad on Friday but a double – Ahmed Hadushi, brother of Saddam Hussein's trusted Major Jabar Hadushi, who had undergone plastic surgery several times to increase his similarity to Saddam Hussein.

Though the reports were unconfirmed, the normally reliable Iranian News Agency suggested that uprisings had begun in Baghdad with local people fighting with Fedayeen, which left 35 Iraqi soldiers dead. Iraqi satellite television went off air yesterday for the longest period it has been off air since the war began.

There were also unconfirmed reports of another missile landing in central Baghdad in the Mansour area with a death toll between two and 14. An official at Kindi hospital spoke of 75 wounded civilians – 75 more chances of another victim like little Ali Ismail Abbas, who was asleep when a missile obliterated his home, killed his parents and nine other family members – and blew off his arms.

The politicians had their eyes elsewhere. The UN Security Council met in the afternoon to discuss Iraq. The President of Chile, Ricardo Lagos, which currently sits on the Security Council, said that the UN should have a key role in post-war Iraq. Afterwards Kofi Annan, the UN secretary general, said that he expected the UN to play an important role in rebuilding Iraq after the war and said this would bring legitimacy to the political reconstruction. Later, foreign ministers of the six-nation Gulf Co-operation Council held an emergency meeting in Kuwait to discuss the Iraq war. And 30 Christian and Muslim scholars from across the world began a summit in Qatar, which its leader, the Archbishop of Canterbury, Rowan Williams, described as "a clear demonstration that we do not have to be imprisoned in mutual hostility and misunderstanding".

The day concluded with Mr Bush and Mr Blair meeting for dinner at the start of their two-day summit at Hillsborough Castle near Belfast. The agenda includes a genuflection towards the Northern Ireland peace process and, if Mr Blair gets his way, a bit of time on the Israel-Palestinian conflict in an effort to mollify Arab anger over the war, with the Prime Minister pressing for the release of the elusive Middle East "road-map" to peace. But the main business will be Mr Blair pushing a reluctant Mr Bush to allow a leading role for the UN in rebuilding Iraq.

Not that Mr Bush will be impressed but Mr Blair will get the backing of Sinn Fein. Yesterday Sinn Fein's chairman, Mitchel McLaughlin, predicted that the invasion of Iraq by US and UK-led forces could have the same consequences as the British occupation of Ireland. There's a cheery thought.

Words of war

Mohammed Saeed al-Sahaf, Iraqi Information Minister

"The infidels are committing suicide by the hundreds on the gates of Baghdad. Do not believe those liars."

Geoff Hoon, Defence Secretary

On looting: "It does appear ... to be confined to Iraqi citizens – shall I use the word 'liberating' those items that are in the charge of the regime – going into the former facilities of the regime, to the secret organisations and redistributing that wealth among the Iraqi people."

Kofi Annan, UN secretary general

"I do expect the UN to play an important role, and the UN has had good experience in this area ... above all the UN involvement does bring legitimacy, which is necessary for the country, for the region and for the peoples around the world."

Colin Powell, US Secretary of State

"The hostilities phase is coming to a conclusion."

Invasion of Iraq - day's events

MONDAY 6.15am BST: US troops reported to have taken Saddam Hussein's main presidential palace in central Baghdad.

7.30: Iraq's Information Minister claims US armoured columns have been forced out of the city – as correspondents report continued fighting.

11.30: Britain has "strong indications" that "Chemical Ali" has been killed in a coalition attack, says Geoff Hoon, the Defence Secretary.

6.30pm: George Bush arrives in Belfast for a summit with Tony Blair.

7.00: US officials say field tests on chemicals found near Karbala suggest possible presence of nerve agents.

7.05: Firefight breaks out in Nasiriyah, believed to be between pro and anti-Saddam Iraqi groups.