US Central Command claimed much of Baghdad was no longer in the hands of Saddam's regime but AFP journalists in the capital and US officers outside it said the Iraqi defences had fought back with some force.

An Iraqi rocket attack on a command tent south of Baghdad killed two US soldiers and two journalists, and wounded 15 soldiers, two of them critically. Names and details were not released.

Coalition partner Britain said the battle for Iraq's second city, Basra in the south, was effectively over. It said reports indicated that a Saddam cousin blamed for a gas attack on Iraqi Kurds, "Chemical Ali," had been killed.

Television viewers worldwide saw dramatic footage of US troops moving on Saddam's Republican Palace compound in Baghdad, during what commanders described as a raid and not an all-out assault to take the capital.

Spokesmen refused to be drawn on whether the troops would stay after officers said more than 100 tanks and armoured vehicles pushed into Baghdad after daybreak.

A series of explosions in the morning was punctuated by gunfire, while in the afternoon a fierce battle was heard raging around the landmark Al-Rashid hotel. Iraqi fighters blocked journalists from approaching the area.

"The regime is not in control of the whole city," Brigadier General Vincent Brooks told reporters at the Central Command base in Qatar, adding that it would be up to field commanders to decide whether to hold their ground.

Lieutenant Colonel Peter Bayer, the 3rd Infantry Division's operations officer, told AFP: "We've been significantly challenged."

Earlier he said that US troops "own" two Saddam palaces in the city centre and a third near the airport southwest of the capital.

The United States and Britain, which launched the war on March 20, say it will not be over until Saddam and his inner circle are ousted from power. They have expressed doubt over Iraq's insistence that Saddam is still alive.

In mid-afternoon, as the fighting was raging, state television showed him meeting with a senior aide though there was no way to know when the footage was shot.

His information minister, Mohammed Said al-Sahhaf, denied US forces were in Baghdad. He was speaking to reporters close to the Republican Palace, where US tanks and armour were parked outside.

"The war of words is over," said Captain Frank Thorp, a US spokesman.

A missile crashed into a residential neighborhood in central Baghdad, according to AFP correspondents in the city who saw ambulances leaving the scene with sirens wailing.

From the southeast, US Marines entered Baghdad undeterred by the blowing up of two bridges on the Diyala River, which runs east of the Iraqi capital.

"We're in Baghdad and we're in Baghdad to stay," said Brigadier General John Kelly, assistant commander of the First Marine Division.

In the south of the country, British troops poured into the second largest city of Basra.

"The battle (for Basra) is more or less over now," Lieutenant Colonel Hugh Blackman of the 7th Armoured Brigade said.

"We are covering all the areas of Basra, including the old city. There are soldiers and armoured vehicles inside (the old city) right now."

Royal Marine commandos seized Saddam's presidential palace in Basra and other troops were in control of the city's main university after killing a dozen Iraqi militiamen holed up there.

British Defence Secretary Defence Secretary Geoff Hoon said there was strong evidence that Ali Hasan al-Majid, the notorious Iraqi official better known as "Chemical Ali", had been killed in a coalition air strike three days earlier.

"We have some strong indications that he was killed in the raid conducted Friday night but I can't yet absolutely confirm the fact that he is dead. But that would be certainly my best judgement in the situation," Hoon told a London press conference.

Many Iraqis gave a rousing welcome to US Marines as they closed on the last 80 kilometers (50 miles) of their drive towards Baghdad, and there were similar scenes of jubilation in Basra.

Hundreds of men yelled "kill Saddam", as they sliced their thumbs across their throats, an AFP reporter with the marines said.

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