The United States meanwhile said it was unsure if an air raid on Monday had killed President Saddam Hussein, while US authorities faced tough questioning after American fire killed three journalists in Baghdad.

Fresh fighting broke out in southern Baghdad early Wednesday, AFP correspondents said, reporting intense artillery and automatic weapons fire that began around around 07:00 (0300 GMT).

The US military said Baghdad was now surrounded and that its forces were in the heart of the city.

Thousands of marines poured in from the east Tuesday while waves of airstrikes pounded the southern and southeastern fringes of the city.

In the centre, two US tanks moved onto the key Al-Jumhuriya bridge over the river Tigris, sparking exchanges of fire with lightly-armed Iraqis holed up on the east bank of the river.

The bridge is adjacent to the main presidential palace compound which US forces have partially occupied amid heavy clashes.

Military officials said one US marine was killed and six others wounded in firefights in the Baghdad suburbs.

Despite the Iraqi setbacks, Information Minister Mohammad Said al-Sahhaf remained defiant, telling journalists US forces would surrender "or be burned in their tanks."

Hundreds of families could be seen fleeing the fighting in the capital in cars, trucks and minibuses on the 21st day of the US-led war aimed at toppling Saddam's regime.

"I'm closing the house and leaving with my family for a safer place. I will come back every now and then to see if something happened," said Ali Rishek, 53, before driving away with his wife and their three children.

The heavy fighting also took its toll on the city's hospitals, with international aid agencies warning medical supplies were critically low and hospitals were stretched to the limit because of a large number of civilian casualties.

"The situation in Baghdad is starting to become critical especially with the power cuts," said Nada Doumani, a spokeswoman for the International Committee of the Red Cross (ICRC), adding that the cuts were affecting water supplies.

Though the US military appeared increasingly confident about the military operation, it was unsure of the success of its latest attempt to bomb Saddam and his two sons.

Major General Stanley McChrystal, vice director of operations of the Joint Staff, told a Washington press briefing that the air strike on Monday had been "very, very effective," but it was not known if the targets were still alive.

The Times of London said Britain's foreign intelligence service, MI6, told the US Central Intelligence Agency it believed Saddam left the targeted building in Baghdad just before it was bombed.

"We think he left the same way he arrived ... either by a tunnel system or by car, we're not sure," a British intelligence source was quoted as saying.

Witnesses said at least 14 civilians were killed in the bombing that destroyed four houses and left a crater eight meters (26 feet) deep and 15 meters wide in Baghdad's upmarket Al-Mansur district.

"I don't know whether he survived ... The only thing I know is that he is losing power... Saddam Hussein will be gone," US President George W. Bush said following a meeting with his chief ally British Prime Minister Tony Blair in Belfast, the third in as many weeks.

The US military was forced onto the defensive Tuesday after three journalists were killed in Baghdad by US fire.

Cameramen from the Reuters news agency and Spanish television station Telecinco were killed when a US tank shell hit the Palestine Hotel, where the majority of the international media is stationed.

The US military said the tank had fired a single round at the hotel in response to grenade and small arms fire from the building. Journalists there at the time were adamant they had heard no gunfire come from the building.

And a correspondent for the Qatar-based Al-Jazeera network died after the station's offices were hit in a separate attack that the news channel said was a deliberate US strike.

The attacks brought calls from journalists' groups for an investigation and put in question US assertions that US forces were taking utmost care to avoid civilian casualties.

Meanwhile, the Pentagon announced Tuesday that 96 US military personnel have been killed and 155 injured since the war on Iraq began March 20.

Ten others are reported missing in action, including two airmen whose F-15E jet fighter went down over Iraq on Sunday.

It was the second US warplane lost over Iraq in two days, following the announcement that an A-10 Thunderbolt strike aircraft had crashed Tuesday after apparently being hit by a surface-to-air missile over Baghdad.

The pilot was later recovered and evacuated.

Setting his sights on post-war Iraq, George Bush provided some relief to key allies as well as opponents of the war when he pledged at his meeting in Belfast with Blair that the United Nations would have a "vital role" to play in rebuilding the country.

He denied a reported split with Britain over the UN's role in supervising an interim Iraqi government. London wants the United Nations to oversee any interim Iraqi administration while Washington has sought initial US-British military control.

In London, Iraqi opposition groups said they would meet in the southern Iraqi city of Nasiriyah on Saturday to discuss the country's future.

In southern Iraq, a spokesman for British forces said "a couple more days" were needed before Iraq's second city of Basra could be declared secure, a day after Britain had said the battle for the city was largely over.

While some Basra residents defaced murals of Saddam after the British entered, thousands looted public buildings and homes of Baath party members.

British spokesman Colonel Chris Vernon said that senior officers had met with an unidentified Iraqi leader to draw up an interim committee to run the city after the collapse of Saddam's Baath party in the city.

Meanwhile the United States was drawing up plans to scrub Iraqi schools of militaristic, pro-Saddam rhetoric.

The United States Agency for International Development said it is currently reviewing bids for a contract, reported to be worth some 65 million dollars, to revamp the country's educational system, from printing new textbooks to handing out chalkboards, pencils and book bags.

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