As witnesses reported the sounds of fierce fighting from the outskirts of Tikrit, aspokesman for the US Central Command (Centcom) in Qatar, said, "We have forces in Tikrit. We are actively engaging any forces we need to."

Asked to describe the fighting, he said it was "spotty" but added that "when you are engaged in a firefight it is always fierce."

He said Task Force Tripoli, made up of members of the First Marine Expeditionary Force, was involved in the fighting "in and around Tikrit."

Some 250 US armoured vehicles had entered the city and Brigadier John Kelly said five Iraqi tanks had been destroyed on the outskirts and at least 15 people killed in firefights, Canadian journalist Matthew Fisher, "embedded" with the marines, told CNN.

The US assault apparently ignored an appeal from 22 Tikrit tribal leaders for an end to coalition bombardment of Tikrit so a peaceful surrender of pro-Saddam militia there could be negotiated.

"We are ready to surrender, but let them stop their bombardments. After that we are asking for just two days to persuade the fedayeen (militia) to lay down their arms," Yussuf Abdul Aziz al Nassari told AFP in company with a number of other tribal chiefs.

In Tikrit earlier Sunday no militia or Iraqi troops were seen in the city centre, only a number of armed residents who said they wanted to prevent the looting that has occurred in every Iraqi city abandoned to the coalition by forces loyal to Saddam.

The residents, carrying Kalashnikov assault rifles and grenades, told AFP they would surrender to US forces, being led by the 1st Marine Expeditionary Force, if these were not accompanied by Iraqi opponents of Saddam's regime, notably Shiites and Kurds.

Tikrit, Saddam's traditional powerbase, lies about 180 kilometresmiles) north of Baghdad and is considered the last major city not under control of the coalition forces.

Tikrit and other parts of the north betweeen Baghdad and Kirkuk, where remnants of Iraqi forces were resisting, are now the main target of coalition forces, said Centcom officials.

In Baghdad US troops discovered 278 artillery shells carrying a substance that tested positive as a chemical agent, senior officers said.

The shells containing suspected blister agents were found Saturday in trailers parked in a schoolyard, said Major Stephen Armes of the Marines 1st Battalion.

US-led forces who invaded Iraq on March 20 in a declared bid to strip it of suspected nuclear, chemical and biological weapons have yet to find what they consider a "smoking gun", proof that Saddam's regime possessed such arms.

In southern Iraq, coalition forces were engaged in mop-up operations, US Major Rumi Nielson-Green said in Qatar.

US marines "entered Al Kut unopposed, they were assisted by contacts with local leaders," added Captain Frank Thorp.

A tip-off from local Iraqis also led to US troops finding seven US soldiers thought to have been taken prisoner north of Baghdad earlier in the war, US military commander General Tommy Franks said.

US forces, facing mounting anger among Baghdadis for failing to stem days of looting by rampaging youths since taking the capital on Wednesday, set up an operations centre in the city centre to recruit Iraqi workers for key sectors.

In an ominous sign of possible violence still to come, US military officials said marines had uncovered 310 vests fitted for use by suicide bombers, with about half of them "engineered with explosives".

But a US spokesman in Baghdad said US troops would start joint patrols at an unspecified date with Iraqi security forces in a bid to restore order to the capital hit by looting after the fall of the Baghdad regime.

Franks said he may go to Baghdad this week to visit US troops stationed there.

He also said some Iraqi leaders had been captured by US-led forces as they were trying to flee Iraq and were being held in the western part of the country. He gave no details on their identity but said: "They're in western Iraq."

Kurdish TV meanwhile reported that coalition forces had captured Saddam Hussein's half-brother Watban, who had served as his interior minister, as he attempted to cross into Syria.

In northern Iraq, a move to coopt the existing police force in the oil-rich city of Mosul sparked an angry reaction from Kurdish residents, who had greeted the collapse of Saddam's government with jubilation.

Since Kurdish rebel fighters entered Mosul on Friday, the city of 1.5 million people has been rocked by ethnic violence between the Kurds and Arab residents which hospital officials say has killed as many as 20 people.

In the northern oil capital of Kirkuk, US troops were deployed outside the governor's office, in a sign they were steadily taking over control of the city from Kurdish forces as demanded by neighboring Turkey.

Turkish Foreign Minister Abdullah Gul said Kurdish forces had withdrawn from both Kirkuk and Mosul in line with US assurances.

In central Iraq, gunmen in the holy city of Najaf surrounded the house of Ayatollah Ali Sistani, Iraq's leading Shiite cleric, ordering him to leave the country within 48 hours, a cleric in Kuwait told AFP.

Both Britain and the United States announced they were beginning to scale back their military presence in the Gulf now that the strike phase of the war was over.

SPACE.WIRE