The reports came after a night of intense bombardments on Baghdad, where four divisions of President Saddam Hussein's elite Republican Guard were dug in to defend the capital from any ground attack by US and British forces.

Saddam's main presidential palace complex in the Iraqi capital, a potent symbol of his iron 24-year rule, came under fresh daylight bombardment on Tuesday for the second consecutive day, an AFP reporter said.

The palace grounds have been a frequent target in the bombing.

Iraqi Information Minister Mohammad Said al-Sahhaf said that 18 people were killed and more than 100 wounded since late Monday. According to Iraqi officials, hundreds of civilians have been killed in the 13-day-old war.

He added that several people were wounded Monday in the western town of Rutba when a US warplane attacked two buses carrying international volunteers, some of them US citizens, who were in the country as "human shields."

US Brigadier General Vincent Brooks told reporters at Central Command's forward planning base in Qatar that he was unable to confirm the report.

US forces meanwhile stepped up military operations south of Baghdad ahead of an expected major push on the Iraqi capital.

The checkpoint shooting occurred at Najaf, 150 kilometers (95 miles) south of Baghdad on Monday afternoon, Navy Lieutenant Commander Charles Owens said at operational headquarters in Qatar.

The incident, together with continual bombing on Baghdad, was thought likely to fuel vocal international opposition to the war and undermine US efforts to win support from the Iraqi people.

Owens said the victims, seven women and children, were in a civilian vehicle that failed to stop at the military post despite repeated warning shots fired by US troops. Four people in the vehicle escaped unharmed.

The Washington Post reported that 10 civilians had been killed in the incident and quoted US Army 3rd Division Captain Ronny Johnson as shouting over the radio to his men after the shooting: "You just (expletive) killed a family because you didn't fire a warning shot soon enough."

In Qatar, Owens countered that: "As a last resort, they (US troops) fired into the passenger compartment of the vehicle," and said that an investigation had been opened.

In central Iraq, the commander of the Third Infantry Division, Major General Buford Blount, said: "We're very concerned... and very sorry that it happened."

With US troops on edge after a suicide car bomb attack Saturday near Najaf killed four soldiers, Blount stressed that the unit that opened fire at the checkpoint had respected their rules of engagement.

Brooks added: "While we regret the loss of civilian lives ... they remain unavoidable as they have been throughout history."

In Geneva the International Committee of the Red Cross (ICRC) said it regretted the incident and that it hoped US troops took "all the necessary measures" to warn the civilians before opening fire.

Spokeswoman Antonella Notari said civilians must be spared as much as possible, but acknowledged that military authorities had the right to try to ensure the safety of their troops.

Iraqi citizens living through nightly bombardments on Baghdad saw the capital come under a fresh and intense wave of bombing.

AFP reporters said the raids on Baghdad were growing more intense and that the barrage late Monday seemed to be the heaviest yet to have hit the battered city's downtown area.

A plume of smoke rose into the air after a missile or smart bomb crashed into the heart of the presidential compound Tuesday.

In the north, coalition warplanes kept up heavy airstrikes on Iraqi army positions in and around the oil centre of Kirkuk, rebel Kurdish officials said.

In Kuwait, air raid sirens sounded for the first time since Saturday. A defence ministry spokesman later said an Iraqi missile had been shot down over southern Iraq.

The US Army's elite 101st Airborne division stepped up its campaign around Najaf after killing several opposition fighters and taking another 20 prisoner, military officials said.

The "Screaming Eagles" began the third day of their campaign to secure the areas south and north of the Shiite Muslim holy city by sending in another battalion of Apache attack helicopters to support infantry troops.

Najaf and Karbala, another Shiite pilgrimage city a further 80 kilometres (50 miles) closer to Baghdad, are considered vital to securing communication and supply lines in the push toward the Iraqi capital.

In Qatar, Brooks said that US forces had captured an Iraqi general in fighting in the Karbala region: "The attacks were very effective and resulted in the capture of an Iraqi general with very valuable information."

South of the capital, US troops reported their first serious fighting with the Republican Guard, considered Iraq's most determined military unit and key to the defense of Baghdad.

US officers said 200 Iraqis were killed, wounded or captured in the clashes which broke out overnight near Karbala, 80 kilometers from Baghdad.

Reports of the battle around Karbala came as US armoured units finalised plans for a decisive thrust toward Baghdad within a week, commanders said, with forces concentrated near Najaf, to the south.

In Basra, seen as key to controlling the southeast, British troops said they were waiting for reinforcements before making a final push to take the city.

Flight Lieutenant Peter Darling said British troops were "nibbling at the edges" of Iraqi defences in the city of more than one million people which is seen as a vital staging post for humanitarian supplies.

British commanders said 600 soldiers backed by tanks and armoured vehicles were battling to punch through the town of Abu Al Khasib, 20 kilometersmiles) to the southeast of Basra, as British artillery pounded Basra's western edge.

An Iraqi military spokesman said at least 54 US and British soldiers had been killed in fighting since Sunday, most of them around Basra, with an unspecified number of others killed in other parts of Iraq.

Officials in London said a British soldier was killed on duty in southern Iraq, taking to 26 the British death toll since the start of the war. US authorities say at least 39 US soldiers have been killed.

In Baghdad, a regime spokesman denied reports that members of Saddam's family were trying to flee the country.

"The fate of his family cannot be separated from that of the extended family (the Iraqi people)," he said, quoted by state television.

The denial came after US Defence Department Spokeswoman Victoria Clarke said: "We have seen evidence that family members are fleeing the country, or trying to flee the country."

Stock markets in Asia and Europe stabilised, the dollar bounced back slightly and oil prices slipped amid increased investor confidence.

In Brussels, a diplomatic source said that US Secretary of State Colin Powell could hold discussions on Iraq with European Union foreign ministers on Thursday.

In Russia, Deputy Foreign Minister Alexander Losyukov said the war was likely to fuel North Korea's nuclear ambitions.

Diplomatic sources in Jordan said authorities had foiled two Iraqi plots to attack US interests in its western neighbour, including a bid to poison the water supply of US troops and an attempted bombing of a luxury hotel.

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SPACE.WIRE