Our correspondent Hamid Hadeed in Falluja reported that US forces bombed Jolan and Shuhada quarters.

Fierce clashes erupted overnight between the US forces and Iraqi resistance fighters. US aircraft dropped cluster bombs over Jolan, he said.

The city also came under intensive artillery bombardment. 

In Falluja, the 11-strong Iraqi delegation of town and tribal elders arrived nearly two hours behind schedule shortly before 1700 (1300 GMT).

They asked that their names not be released and that no pictures be taken of them for fear of reprisals by militants, the Associated Press reported.

Afterwards, Hashem al-Hassani, a representative of the US-appointed Iraqi Governing Council who led the delegation, said he was "optimistic" about the talks.

"Fallujans want to return to peace and normal life. They are willing to take steps in that direction and the same is true of the coalition forces," he said.

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The Falluja leaders want the US marines to withdraw - at least partially.

They also want to deploy a locally recruited police force.

Iraqi mediators say the two sides have agreed in principle to give ground on some of their demands - but no details have been released.

Al-Kubaysi says despite compliance by Al-Fallujah residents with the ceasefire, the US forces continued to take up positions and dig trenches to encircle the city. He adds: "Last night and during daytime yesterday, massacres were committed against the citizens of Al-Fallujah by US planes that use the banned cluster bombs."

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He also accuses the US forces of taking away children who were not involved in fighting to a juice plant, "which was turned into a big prison and a place for torturing the children of Al-Fallujah."

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Al-Kubaysi notes that the US forces yesterday [15 April] denied the negotiating delegation access to Al-Fallujah and prevented medical aid from going into the city. He says that the delegation was allowed to enter Al-Fallujah today. He notes that Dr. Makki Husayn al-Kubaysi, leader of the MUC in Al-Fallujah, "is playing a leading role to calm the situation."

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Answering a question by the correspondent of Al-Sabah newspaper, Al-Kubaysi says: "I was contacted by the father of two persons two days ago. He was arrested along with his two sons on 7 April and was released two days ago. He said they practice torture in that factory. He said people, including his two sons, were tortured. They were forced to stand for long hours and were given one loaf of bread a day. Their mouths were gagged with a Scotch tape. Horrible methods of torture are being used in that factory."

Answering a question, Al-Kubaysi says: "With regard to the issue of Arab fighters, it seems that the US side forgot it. I do not know why. We did not discuss this issue. Neither did we discuss the handing over of weapons during the last meeting." He adds: "As for the issue of Arab fighters, its reality has been twisted. We do not know what is going on in the minds of the Americans."

A shaky truce has been in place since April 12, after the head of the U.S.-led Coalition Provisional Authority, Paul Bremer, called for a cease fire to allow in humanitarian supplies and to "allow residents of Falluja to tend to wounded and dead." U.S. troops reportedly used loudspeakers to announce that women, children, and elderly could leave the city, but not "military age men." Subsequent reports however indicate that men have been among the thousands who have fled, mainly to Baghdad.

The number of killed and wounded is sharply disputed. The director of Falluja's general hospital, Rafa al-Issawi, reportedly estimated that some 600 persons had been killed, citing reports from clinics in the city and several soccer fields where bodies were being interred. News correspondents reported seeing rows of freshly dug graves at one of the soccer fields and Khalaf al-Jumaili, a volunteer gravedigger, told the Associated Press that more than 300 persons had been buried there.

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"Reports of hundreds of civilian casualties in Falluja are unconfirmed, but serious enough to warrant further inquiry," Stork said. "At this point we just don't know the numbers or if their deaths were the result of any unlawful behavior on the part of U.S. troops. That's why an impartial and comprehensive investigation is in order."

Human Rights Watch said that all parties to the conflict have a duty not to subject civilians unnecessarily to the dangers of military operations.

Al-Issawi, the hospital director, also said that many of the dead were women, children, and the elderly. U.S. military officials have insisted that U.S. forces have taken great precaution to avoid harming civilians and civilian casualties have been minimal.

One mortar fell on a Jordanian field hospital in the city's outskirts, a government spokesman denounced in Amman, adding that a minor official "had been slightly wounded in the hand."

Last Friday the U.S. military said it had suspended offensive operations in Falluja but would hit back if attacked. Talks to stabilise a shaky truce have led to relative calm interspersed with intense bouts of fighting and air strikes.