In a lightning morning raid, more than 100 tanks and armoured vehicles pushed to the centre of his embattled capital city, now all but encircled by an iron ring of US firepower.

But the Pentagon insisted the "Battle of Baghdad" had yet to begin, and AFP correspondents said key nerve centres including the ministries of information and foreign affairs near the main palace remained under Iraqi control.

A spokesman at US Central Command in Qatar, Navy Captain Frank Thorp, told Sky News that Monday was "just another day" and reiterated that US forces would continue to make only "deliberate" and carefully weighed moves on Baghdad.

Massive explosions roared across the sky as battling troops exchanged mortar and rocket-propelled grenades. Rocket fire was heard downtown for the first time since the war began on March 20.

"This does not represent the battle for Baghdad. What this is, is a powerful message that we can go where we want, when we want," US Department of Defense spokesman Major Ben Owens said.

Two Bradley fighting vehicles could be seen on the grounds of Saddam's cherished Republican Palace compound, already battered by weeks of coalition air strikes and now covered in thick smoke.

Fuel trenches inside were set ablaze, belching out layers of smoke in an apparent Iraqi bid to hamper the vision of US forces, and an arms depot was on fire. Troops could be seen moving around the outside wall by the river.

Lieutenant Colonel Peter Bayer, operations officer for the US army's 3rd Infantry Division, said US troops had "secured the main presidential palace" and another palace in the city center as well as a third near the airport.

"There are two palaces (in the city center), we own both of them," Bayer said.

He said they had been captured by the division's Second Brigade which sent two tank battalions and a mechanized infantry battalion, totaling some 65 tanks and 40 Bradley fighting vehicles, into the city.

Iraqi Information Minister Mohammad Said al-Sahhaf told reporters that US forces had been "repulsed".

Heavy explosions had begun booming into the grey skies from around 6:15 am (0215 GMT), apparently from artillery fire to the capital's west -- site of the international airport which was seized by US troops Friday.

As the fighting raged, the streets were all but deserted. Almost all central shops were closed, and the station for buses out of Baghdad was empty.

Warplanes had flown over the city all night, sometimes at low altitude, without bombing any targets.

In a display of their increasing mastery of the Iraqi capital, US military authorities announced that a C-130 transport plane had touched down at the airport.

US troops were meanwhile moving to encircle Baghdad to prevent any escape from the city by its defenders.

Major Ross Coffman said the 3rd Infantry Division had completed the western portion of the encirclement and was waiting for US marines to close the door from the east.

After completing a 70-kilometre (40-mile) drive, the army controlled a semi-circle around Baghdad extending from the Tigris in the north to where the river leaves the capital in the south.

A US general leading marines outside Baghdad meanwhile said Iraqi forces had blown up two bridges over the Diyala river east of the city, in an apparent bid to slow the advance of US forces.

In the deep south, British troops advanced into the centre of the regional capital of Basra, surrounding the offices of the ruling Baath Party to cheers from jubilant locals, officers and correspondents reported.

"We control the vast majority of the city," British military spokesman Colonel Chris Vernon said, adding that British tanks had moved into the centre as well as its northern and southern suburbs.

Officers said at least 300 Fedayeen militia fighters were estimated to have died in clashes over two days as the British surged forward.

Three UK soldiers were killed in the action, the British defence ministry said Sunday, taking to 30 the number of British servicemen to die in the 18-day-old war.

Forces from the US 101st Airborne Division meanwhile secured the central city of Karbala, killing 400 Iraqi paramilitaries as they crushed resistance from about 500 Saddam loyalists, division spokesman Major Hugh Cate told AFP.

Officers said fewer than 100 Iraqis had been taken prisoner while almost all the rest were killed in a battle that saw intensive house-to-house searches.

The coalition advance was marred by a "friendly fire" incident in Kurdish rebel-held northern Iraq on Sunday.

Eighteen Kurds were killed and 45 others wounded near the city of Arbil when US aircraft mistakenly bombed a convoy, according to Kurdish sources.

Kurdistan Democratic Party (KDP) external relations official Hoshyar Zebari said all those killed were peshmerga fighters but the BBC said one of its translators was killed and hospital sources said four US special forces also lost their lives.

Among the seriously wounded in the attack at Dibaga, 20 kilometresmiles) south of Arbil, was Wajih Barzani, the head of KDP special forces and brother of party leader Massoud Barzani.

A total of 81 US troops have been killed since the beginning of the war, the Pentagon reported Sunday.

burs/mc/kir

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