In the pavement cafes, people moan that the structure is bigger than anything Saddam Hussein built. They are not impressed by the architects' claims that it will be visible from space and cover an area larger than Vatican City. They are more interested in knowing whether the US State Department paid for the prime real estate or simply took it.

While families suffer electricity cuts, queue all day to fuel their cars and wait for water pipes to be connected, the US mission, due to open in June next year, will have its own power and water plants to cater for a population the size of a small town.

The design of the compound is supposed to be a secret, but you cannot hide the concrete contours of the 21 buildings that are taking shape.

Looming over the skyline, the embassy has the distinction of being the only big US building project in Iraq that is on time and within budget. In a week when Washington revealed a startling list of missed deadlines and overspending on building projects, Congress was told the bill for the embassy was $US592million ($772million).

The heavily guarded 42ha site - which will have a 3m-thick perimeter wall - has hundreds of workers swarming on scaffolding. Locals are bitter that the Kuwaiti contractor has employed only foreign staff.

Diplomats, after roughing it in Saddam's abandoned palaces, should have every comfort in their new home. The plans are rumoured to include the biggest swimming pool in Iraq, a gymnasium, a cinema, restaurants offering delicacies from US food chains, tennis courts and a swish American Club for functions.

A State Department official said the size reflected the "massive amount of work still facing the US and our commitment to see it through".

Three Iraqi army officers -- a major, a lieutenant colonel and first lieutenant -- were killed when a suicide bomber, dressed as an army officer, blew himself up at an Iraqi army base in the northern city of Tikrit.

In another attack, two children were killed when a mortar landed on their house in northern Baghdad.

Two policemen were killed when a roadside bomb struck their vehicle in Samarra, 125 kilometres (78 miles) north of Baghdad. Their convoy had been tasked with escorting emergency medical cases, a security source said.

A US soldier was killed Friday in a roadside bombing in the Iraqi capital, the US military announced Saturday, bringing the latest US military death toll in Iraq since the March 2003 invasion to 2,414 according to an AFP count based on
Pentagon figures.

In a series of abductions south of Baghdad, seven people, including three police commandos, were kidnapped Saturday, police said.

Gunmen kidnapped the commandos as they were on their way to work in the town of Al-Mahawil, 90 kilometers (56 miles) south of Baghdad.

The other four, including two truck drivers, were also kidnapped in Mahawil in two separate incidents.

No one on the ground was hurt in the crash, police said. But two Iraqis were killed in clashes after youths chanted victory slogans for the Mehdi Army, a Shi'ite militia opposed to the occupying forces. The British military denied opening fire.

"I can confirm the tragic deaths of a number of British service personnel," said Defense Secretary Des Browne, who was appointed only on Friday in a cabinet reshuffle.

As troops in Warrior armored battle vehicles, some with riot shields, cordoned off the area, youths chanting "Victory to the Mehdi Army" threw rocks and then petrol bombs. Soldiers used foam to douse fires ignited on their vehicles.

British military spokesman, Squadron Leader Al Green, said troops counted about 60 rounds fired in the air from the crowd -- not uncommon in Iraq -- and said no British shot was fired.

A local journalist said he was hit in the leg by a British plastic round and saw troops aim their ordinary rifles. He said he saw at least one man dead. Witnesses said a second man may have died in a car, the windshield of which was smashed and bloodied.

Several people, including children, were wounded when a mortar round later struck a house nearby, witnesses said.

Dominated by the Shi'ite Muslim majority now in control in Baghdad, Basra has seen less violence than cities in the north. But friction between the occupying force and militia groups like the Mehdi Army of Shi'ite cleric Moqtada al-Sadr does flare up.

British military sources confirmed ground fire seemed the likeliest explanation for the crash, near the local governor's office. The make of the helicopter was not clear.

Basra police spokesman Lieutenant Colonel Kareem al-Zaidi said: "A Multi-National Forces helicopter was hit by a rocket."

GOVERNMENT

Sadr, a firebrand in his early 30s, demands an end to the U.S. and British occupation. He is a key figure in the Islamist Alliance bloc that will lead a new Iraqi government.

In September last year, British forces clashed with Mehdi Army militants. The British public was startled by images of a soldier escaping an armored vehicle, his uniform in flames.

Senior British officers have complained rival Shi'ite militia factions have effectively taken control of different elements of Iraq's second city, close to the Gulf and the border with Shi'ite Iran, 550 km (340 miles) south of Baghdad.

There were signs of agreement among Iraqi leaders that a unity government could be formed soon. Shi'ite Vice President Adel Abdul Mahdi said: "I expect the announcement will come in the next few days ... There are no serious complications."

Sectarian blood-letting has increased since the destruction of a major Shi'ite shrine in Samarra in February, prompting warnings of civil war and adding to pressure from Washington and London for Iraqis to settle their differences quickly.

Both the United States and Britain are keen to withdraw as many troops as possible as quickly as possible and are building up Iraq's own army and police to that end.

SUICIDE BOMBER

Three Iraqi Army officers, including a lieutenant-colonel, were killed inside their base by a suicide bomber in
Saddam Hussein's hometown of Tikrit on Saturday, police said. The battalion commander, a colonel, was wounded.

It was not the first time an insurgent had dressed in army uniform and evaded identity checks to attack Iraqi soldiers.

Sunni Arab insurgents, including al Qaeda's Abu Musab al-Zarqawi, have said they are taking their battle to the Iraqi forces, targeting recruiting lines and senior officers.

Before Saturday, 104 British troops had died in Iraq. About 8,000 are deployed there, along with 133,000 Americans.