Saddam sons 'may have died' in major firefight

Speculation grew this evening that Saddam Hussein's sons Uday and Qusay may have been killed in an American raid on a house in northern Iraq.

A firefight erupted today when US forces surrounded the home of a cousin of Saddam Hussein in the northern city of Mosul, killing four "high-ranking" Iraqis. A senior US official in Iraq said Saddam's sons Odai and Qusai were believed to be among the dead.

But the official, who spoke on condition of anonymity, said investigators were "awaiting postive DNA testing" to confirm the identities. The White House said it could not confirm the deaths but US defence secretary Donald Rumsfeld briefed President Bush about the raid.

An official with the US civilian administration running Iraq said "something big has just happened" but would provide no futher information.

Residents told an Associated Press Television News cameraman in Mosul that American soldiers had come to the house looking for Saddam's elder sons.

Members of the 101st Airborne Division had surrounded the house, which belongs to a cousin of Saddam - a key tribal leader in the region - when the fighting broke out in Mosul, 280 miles north of Baghdad.

The stone, columned house was left charred and smoldering, its high facade riddled with gaping holes from bullets and heavy weaponry. Kiowa helicopters roamed the sky.

Some local residents appeared to have been caught in the crossfire. It was not known how many people were injured, but several were taken to a hospital.

In Washington, Secretary of Defense Donald H. Rumsfeld briefed President George W. Bush about the raid in an Oval Office meeting Tuesday morning, a senior administration official said.

The United States has offered a US$25 million reward for information leading to Saddam's capture and $15 million each for his sons, where were also top leader's in their father's regime.

Also Tuesday, a US soldier was killed and another injured in an ambush along a dangerous road north of Baghdad in the so-called "Sunni Triangle," a center of anti-American resistance

His death brought to 153 the number of US troops killed in action since the March 20 start of war - six more than during the 1991 Gulf War.

US Central Command in Tampa, Florida, said the attackers used rocket-propelled grenades and small arms in the assault staged along the road between Balad, 80 kilometers (50 miles) north f Baghdad, and Ramadi, 100 kilometers (60 miles) west of the capital. It gave no other details.

Both towns lie within the "Sunni Triangle," home to much of the remaining support for Saddam, a Sunni Muslim who used his Baathist Party to oppress the country's Shiite Muslim majority.

The US-led coalition's military occupation of Iraq has been met by constant armed Iraqi resistance, resulting in almost daily deaths of American troops. Many recent assaults have been staged with remote-controlled roadside explosions.

While the military has not released figures on the number of attacks on American forces each day, a senior officer told reporters last week that the attacks were averaging 12 a day.

Seeking to ease fears among exporters to Iraq, the US occupation administration announced it was setting up a trading bank to guarantee payment for imported goods and services,

Outside firms have been hesitant to do business with Iraq, which had been under stiff U.N. economic sanctions since invading Kuwait in 1990, out of worries about being paid.

The new Trade Bank of Iraq, the coalition civilian administration said, will have a pool of $100 million to draw from, with an initial capitalization of $5 million.

The money to support the bank comes from the $1.2 billion Development Fund for Iraq set up by the United States with United Nations approval of the American occupation plan.

It is hoped the new bank will expedite the purchase of materials needed for rebuilding Iraq, including power generators, sewage pipes and oil field equipment.