Australian National Commander for the Middle East Brigadier Maurie McNarn said two of Iraqi President Saddam Hussein's finest divisions had been knocked out of action by US attacks south of the capital over the past two days.

"They've taken a fairly heavy pounding," he told journalists at the US Central Command forward command base here.

"We know that their command and control has been severely degraded. There is increasing disorganisation and there are indications of some fairly desperate manoeuvres."

He said the Medina Division of the elite Republican Guard had suffered particularly high casualties.

But McNarn warned that the Iraqi army was not finished and some units might fight to the end despite the overwhelming coalition force arrayed against them.

"I would not write them off yet -- I think there is still some tough fighting to come," he said.

In the early hours of Thursday, the Iraqis launched a counter-attack to try to recapture a key bridge south of Baghdad but were repulsed, US officials said.

Some 500 Iraqi troops were killed in fighting for the bridge over the Euphrates River some 30 kilometers (20 miles) from the capital, a US officer on the ground said.

"In the attack for this bridge and the counter-attacks, probably 500 died," Major John Altman, an intelligence officer with the 1st brigade of the 3rd Infantry Division, told an "embedded" AFP journalist.

US commanders on Wednesday said two Republican Guard divisions had been destroyed in fighting overnight Tuesday and Wednesday and US troops had fought to within 30 kilometers (20 miles) of the capital.

The Republican Guard, which is believed to have a combined strength of 60,000 men, is considered the best trained and most motivated of Iraq's armed forces.

The Australian brigadier said he did not know whether Saddam himself was dead or alive, but as coalition forces advanced closer to Baghdad it would become clear who was in control of the Iraqi military.

Australia has some 2,000 troops in the US-led coalition fighting to disarm the Iraqi regime of its alleged weapons of mass destruction.

McNarn said the Australian Air Force had flown 130 combat sorties including 70 strike missions since the start of the war on March 20.

They were "heavily involved" in support of the US ground attacks south of Baghdad over the past 36 hours but had not hit targets inside the city itself.

Small squads of Australian commandos were also operating in the western Iraqi desert, where their actions had included attacks against military bases and missile batteries, he said.

The Australian Navy was still clearing mines from the southern Iraqi waterways, including some which he said had been newly laid.

SPACE.WIRE