As violence struck the capital, the U.S. military offered a new cease-fire deal in the battered Sunni town of Falluja where a week of fighting has killed hundreds of people.

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The U.S. truce offer came after Iraqi politicians, decrying "collective punishment" meted out to people in Falluja, demanded a halt to the worst fighting since Saddam Hussein fell.

The aim was to allow peace talks between Iraqi officials and insurgents, with no U.S. participation, Kimmitt said.

U.S. forces said on Friday they were suspending offensive operations in Falluja, west of Baghdad, but the unilateral move failed to halt fighting and new clashes broke out on Saturday.

Four Americans were killed and their bodies publicly mutilated in Falluja 10 days ago, prompting U.S. retaliation.

The US-led coalition, facing mounting criticism of its bloody offensive against insurgents in the town of Fallujah, offered a ceasefire and the prospect of unprecedented mediation talks.

The move came after new cracks appeared Saturday in the occupation of Iraq with the American-installed Governing Council denouncing the six-day-old drive against Sunni Muslim militants and demanding an immediate halt.

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Soon afterward, a 35-member Iraqi delegation, including members of the Governing Council, entered Fallujah to hold talks on ending the fighting, a US officer said, adding they had no guarantees of their reception.

But on the ground, confrontations raged through the morning as battalion commander US Lieutenant Colonel Brennan Byrne said: "I've got no direction of any kind on a ceasefire so I'll continue to fight until I'm instructed to do different.

Marine officials reported that as the relief convoy was approaching the city, insurgents fired mortar rounds at it. They did not report any injuries or any vehicles being damaged.

There was initial confusion about U.S. terms for a cease-fire and the civilian evacuation. Marine officials here said at noon that they were only suspending aggressive military actions for humanitarian reasons and would continue to return fire if attacked.

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Moderate fighting resumed by midafternoon, punctuated by the sporadic crackle of rifle fire and the whoosh of mortars. After dark, AC-130 gunships circled the city, firing rapid bursts from machine guns and cannons with the distinctive sound of a huge pneumatic drill.

It is difficult for journalists to access Falluja, surrounded by U.S. troops who launched a crackdown on insurgents in the town early this week. There are few independent assessments of damage.

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In lulls between fighting, children play in Falluja's near-empty streets, jumping over puddles and rubbish.

"We were driving in the car and we got wounded, me in the shoulder, her in the head, her in the hand," said one small girl, pointing to other wounded children sitting around her in the clinic.

"Why are they doing this to us? We are a family, they shouldn't treat us like this."

Then began the wailing. Women had begun to cry at the discovery of their dead.

Who knows how many Iraqis died? The captain said it was about 40. But sometimes, the Iraqis remove the bodies of their people after a fight before a full count can be made.

On television, the children are unmoving, dead in the streets, blood pooling and spreading underneath them.

On radio, announcers accuse Americans of attacking helpless civilians, not even allowing them to move for treatment of their bullet wounds.

In newspapers, the stories ask if the deaths of perhaps hundreds of innocent civilians is not a greater crime than the horrific deaths and mutilations of four Americans.

For the past week, those have been the images, sounds and words that Iraqis have been taking in as everything here has focused on Fallujah.

In this one week, Fallujah has come to symbolize for Iraqis everything that is wrong with the U.S.-led occupation of Iraq.

"When the four Americans were murdered, almost all Iraqis were horrified, and understood that the reaction must be strong," said Iraqi journalist Dhrgam Mohammed Ali, referring to the killing March 31 of four private security guards whose bodies were then mutilated, dragged through Fallujah and hung from a bridge.

"But now, we see women and children dying, trying to escape and not being allowed to, and many stop remembering the dead Americans. Instead, they wonder why four dead Americans are worth so much, while hundreds of dead Iraqis are worth so little."

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But U.S. officials acknowledge that many of the dead were innocent civilians, and Fallujah, a town of 300,000 according to residents, but only 110,000 according to a year-old medical census, by Wednesday was a cause across much of Iraq.

Brig. Gen. Mark Kimmitt on Saturday again defended American tactics, saying that Marines had been fired upon from mosques and from crowds containing women and children. He said Marines had tried to avoid civilian casualties, firing back in dangerous situations only in self-defense.

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Another, a young woman, asked why the Americans had to take out their anger on a whole city.

"They are angry, yes, but we were not all guilty, and yet we were all punished. Every time they shot another man, his brother, his father, picked up a weapon and swore to kill Americans."

It is high noon, and a handful of U.S. Marines are setting out on a foot patrol as the call to prayer begins emanating from mosques across the city. Some of the Marines on this particular patrol are from a civil affairs unit. They have read books about Iraq and taken courses on Islamic culture. Under normal circumstances, they would be chatting with residents through an interpreter, asking about their problems, trying to make friends.

Instead, today they are stalking enemy territory with M-16s at the ready, thrusting their rifles into windows and doors, crouching behind sand piles and rusted factory equipment, communicating with hand signals, turning sharply at an unseen dog's bark.

And every time they spot another human being, they must instantly decide whether to treat the person as a potential threat or an innocent bystander. That means judging whether a glance is hostile or merely frightened, whether a bundle is more likely to contain food or ammunition.

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But the troops are also under strict orders not to shoot unless shot at first and unless they can take precise aim at their targets. The tension between these imperatives -- to hunt down and attack anti-American insurgents without hurting or alienating the civilian populace -- is palpable in every encounter.

Angry members of the interim council on Friday threatened to resign if American forces did not halt their bloody offensive in Falluja.

Even Adnan Pachachi, widely seen as the most pro-American member of the 25-member council, was incensed by the violence in Falluja.

"We consider the action carried out by US forces as illegal and totally unacceptable," he said.

Speaking to Aljazeera, IGC member and spokesman for the Iraqi Islamic party Hakim al-Hasni also called on fighters in Falluja to halt "military actions".

"US forces in Falluja claim their attacks come in retaliation for the resistance they meet," al-Hasni said. "Therefore, I call upon you (fighters in Falluja), on behalf of the Islamic party, to stop military action in order to prevent bloodshed and give us an opportunity to transfer the injured, bury the killed people and send humanitarian aid to the city," he added.

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Up to the ceasefire and the meeting Falluja remained under siege as US warplanes struck the town twice on Saturday.

In Falluja, the correspondent said US warplanes struck the town at 12:50am (20:50 GMT) and 03:30am (23:30 GMT), injuring at least two people. Several bombs were dropped on different parts of the town. He also said the Golan area came under fierce bombardment hours after US forces had offered a ceasefire.

Witnesses told Aljazeera four houses were targeted in the Golan area.

The only television crew reporting from inside the besieged town, Aljazeera crew members on Friday complained they had been fired at twice during the day.

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Aljazeera correspondent in Falluja, Ahmad Mansur said US F16 planes also bombed places disconcertingly close to the news channel's office.

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Reporting from Falluja, Mansur said the situation inside the besieged town was grim.

Surrounded on all sides by the US occupation soldiers, residents inside have run out of supplies.

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Ambulances arriving from Baghdad to evacuate the seriously injured had difficulty in gaining access to the town.

US soldiers opened fire, forcing six of the ambulances to retreat as they attempted to reach the Talib al-Janabi clinic.

Tough U.S. tactics in Fallouja and Shiite Muslim cities of southern Iraq are driving a wedge between the Americans and their key supporter - the 25-member Governing Council that puts an Iraqi face on the occupation and is expected to serve as the basis of a new government.

One council member, angered by this week's heavy fighting in Fallouja and the prospect of a U.S. move against the militia of an anti-American Shiite cleric, suspended his membership Friday. Four others say they are ready to follow suit.

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The council members threatening to suspend their membership are Ghazi Ajil Yawer, a Sunni tribal leader whose base is in Mosul; Salama Khafaji, a Shiite woman from Baghdad; and Hassani, who is acting on behalf of the Iraqi Islamic Party's council member. According to news reports, Abdul Karim Mohammedawi, a Shiite, announced the suspension of his council membership Friday. Fellow council members said Turkmen member Singul Chapuk was considering suspending her membership. Her aide would not confirm that.

Khafaji is among those trying to facilitate negotiations to end the fighting around Fallouja. One of her aides said that Khafaji would work to make negotiations possible even if occupation authorities failed to do so.

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Hassani's aide Saif Rahman said that his political party has an office in the city, and that the council member was aware of the deteriorating conditions there.

He said people were unable to bring injured to the hospital because they would have to cross the Euphrates River to do so, and troops had blocked access. The party turned its headquarters into a makeshift field hospital. As of late Friday, the field hospital had treated 367 injured people.

Most galling to the Sunni council members, who met Friday night in Pachachi's office, is that they were not allowed to enter Fallouja to negotiate. They said the Americans backtracked on a promise to let Yawer and Hassani into the city because the U.S. military could not guarantee their safety.

The coalition authority "kept saying we were partners�. If given the chance, we could have solved these problems manageably. But using these military tactics, F-16 bombers and helicopters to bomb shops and homes, how can we explain that to the people?" Hassani said.