Flyers signed by a group calling itself Armed Revolutionary Fascists were left at the shops denouncing "the Zionist economy" and including pro-Hizbullah slogans, Pacifici said.

"There are still anti-Semites in Italy," Pacifici said. He told The Associated Press that Italian Jewish organizations have been flooded with dozens of e-mails blaming Jews for violence in the Middle East.

Rome Mayor Walter Veltroni condemned the vandalism.

"Rome and Romans are against any form of anti-Semitism," Veltroni, was quoted as saying by the Corriere della Sera daily. "I hope that the authors of these actions will soon answer for them in court."

Police officials declined to comment on the investigation. Last month, swastikas were spray-painted on walls in the Old Ghetto - Rome's ancient Jewish neighborhood - while hundreds of thousands of soccer fans gathered in the nearby Circus Maximus to celebrate Italy's victory in the World Cup.

Among the leaders attending is Iranian President Mahmoud Ahmadinejad, whose government is accused of being the main financier and weapons supplier of the Shiite Muslim Hezbollah militia.

The United States and Israel have accused Iran of deliberately stoking the conflict and using Hezbollah as a proxy force, an allegation repeatedly denied by Tehran.

Lebanon says more than 800 civilians have been killed by Israeli forces since they launched their offensive on July 12 after Hezbollah staged a deadly cross-border raid in which they captured two Israeli soldiers.

At least 19 Israeli civilians have been killed in retaliatory Hezbollah rocket attacks across the border.

Ahmadinejad arrived in Malaysia early Thursday and is scheduled to hold a press conference at 0830 GMT before departing later in the day.

Speaking late Wednesday, Malaysian Foreign Minister Syed Hamid Albar said the meeting would allow Muslim voices to be heard.

"They are now angry because there has been no action of any sort," Syed Hamid told reporters.

"In the Muslim world there is a feeling of disillusionment, despair, that the UN is slow to take action. What we want is balanced treatment," he said.

Syed Hamid said OIC nations wanted to see a UN peacekeeping force which would include Muslim countries, and that members of the grouping would discuss possible troop commitments to the force.

A statement is expected to be issued at the end of the meeting, and Lebanon's Foreign Minister Fawzi Salloukh said he wanted to see a strong condemnation of Israel's actions.

"We need a strong resolution condemning Israel to support Lebanon at this critical time," he told AFP late Wednesday.

"The main request, the sole request of Lebanon, is a comprehensive and immediate ceasefire, then the withdrawal of Israeli troops to the Israeli's territory," he said.

The minister also called for "an international judiciary committee to judge Israel for its criminal actions, and the return of the Lebanese displaced to their homes, villages and towns."

Other leaders attending include Indonesian President Susilo Bambang Yudhoyono, Pakistan Prime Minister Shaukat Aziz, Turkish Prime Minister Recep Tayyip Erdogan, Bangladesh Prime Minister Khaleda Zia and Brunei's Sultan Hassanal Bolkiah.

The gathering was originally intended to comprise the OIC's executive committee but was expanded to include a number of member countries concerned over the escalation of violence in the Middle East, officials said.

"Stamp on terrorism," he said.

The crowd included members of the Badr Organization, one of the armed Shi'ite groups that Sunni Arabs accuse of running militia death squads, a charge they deny.

"We have to benefit from this wide popular base, and the state and Iraqi people should form these popular regional committees from the best of our young men to face terrorism," Abdul Aziz al-Hakim, one of Iraq's most powerful Shi'ite leaders, told the crowd.

"They will defend people of districts; Sunnis, Shi'ites, Arabs, Kurds and Turkmen. They do not differentiate between anybody."

Prime Minister Nuri al-Maliki, whose reconciliation plan has failed to reduce sectarian bloodshed, has promised to disband the militias many fear will push the country into civil war.

"The first enemy is the Baathist Saddam loyalists and their henchmen, the Islamic extremists," Hakim said.

Officially, the event was held to mark the third anniversary of the death of Hakim's brother, Ayatollah Mohammed Baqer al- Hakim, in a bombing in the southern city of Najaf.

But the speeches also covered explosive issues such as federalism, which is opposed by Sunnis who fear it will leave them deprived of oil in resource-poor central Iraq.

ROADSIDE BOMBS

"We believe that implementation of a federal system in Iraq will achieve justice and rebuild Iraq and guarantee the unity of the Iraqi people and land," Hakim said.

Two roadside bombs killed at least 12 people and wounded 13, mostly young soccer players, in the Baghdad district of Amel on Wednesday evening, a police source said. He said the bombs had been planted near a soccer field opposite a police station.

Two U.S. servicemen were killed in action in Anbar, the U.S. military said.

Earlier, three roadside bombs exploded in central Baghdad near a group of laborers seeking work, killing three people and wounding nine, police sources said.

In Madaen, south of Baghdad, 15 insurgents and three policeman were killed in fighting that began Monday night.

Gunmen in Baquba, north of Baghdad, killed the chief of the traffic police, Ahmed Abdel Hussein, and one of his bodyguards.

Two off-duty Iraqi soldiers and a civilian were killed when a roadside bomb exploded near a truck carrying wheat in Hawija, 70 km (45 miles) southwest of Kirkuk, police said.

A senior coalition officer said the leaders of almost a quarter of the 24,000-strong national police were suspected of crimes and sectarian violence and should be replaced.

"There are 26 battalions. Maybe five or six have leaders who have led them in a way that was either criminal, or sectarian, or both," the official, who spoke on condition of anonymity, told reporters at a briefing in Baghdad.

President George W. Bush has ordered more U.S. troops to Baghdad to quell sectarian bloodshed.

But many question the government's will to confront death squads that could be operating from within the security forces.

"There are (security) forces in Baghdad who don't feel that they have the got the backing of their government to confront the (militias) ... It puts the soldier on the street in a pretty tricky spot," the official said.

Bombings and shootings killed up to 61 people in Iraq on Tuesday, including at least 26 soldiers.

President Jalal Talabani said Iraqi forces could take over security at the end of the year and he was hopeful they could stamp out violence by then, ambitious goals in a country where 100 people are killed every day.

But he did not spell out what he meant. U.S. commanders say handing over security would involve several phases.

"We hope we will end the phenomenon of terrorism this year. Iraqi troops will be gradually taking over all the governorates at the end of the year," said Talabani.

The American soldier, who was assigned to the First Armored Division, died "due to enemy action" in Anbar Province west of Baghdad, the US command said. In a separate statement, the military said a US soldier from the 16th Corps Support Group died the day before in a roadside bombing south of the capital.

In further violence, officials confirmed that about 45 Shi'ite Muslims were kidnapped over the last two weeks on the main highway to Syria and Jordan. The highway passes through Sunni insurgent strongholds west of Baghdad.

The deadliest attack yesterday occurred when a roadside bomb devastated a bus packed with Iraqi soldiers near Beiji, 155 miles north of Baghdad. All 24 people aboard were killed, Defense Ministry spokesman Mohammed al-Askari said. All but four of the dead were Iraqi soldiers, police said.

In Baghdad, 14 people died and 37 were wounded when a car bomb exploded at a bank where police and soldiers were picking up monthly paychecks, police Lieutenant Colonel Abbas Mohammed Salman said.

The blast set several other cars ablaze and scattered dismembered bodies along the street as bystanders carried the injured to ambulances.

Abdul-Hassan Mohammed, 62, a retired teacher who had gone to the bank to pick up his pension, said the explosion slammed him about 12 feet into a wall.

"My friends took me to one of their stores, gave me water, and asked me to relax," Mohammed said. "I didn't even get my pension."

It was the third major attack in less than a week in Karradah, a fashionable, mostly Shi'ite neighborhood in central Baghdad that is home to several prominent politicians. Last Thursday, 31 people were killed in an attack that included rockets, mortars, and a car bomb.

On Monday, gunmen dressed in military fatigues abducted 26 people from the offices of the Iraqi-American Chamber of Commerce and a nearby mobile phone company.

The British soldier was fatally wounded in a mortar barrage before dawn yesterday on a British base in the southern city of Basra, the British Defense Ministry said. Britain has lost 115 soldiers in Iraq since the US-led invasion in March 2003.

There was no claim of responsibility for the barrage. But it followed a crackdown by the British on Shi'ite militias that have infiltrated security forces in the city and threaten the authority of the government in Baghdad.

In the southern city of Najaf, Governor Assad Abu Kilal said 45 people from his province had disappeared while traveling by bus through the Sunni-dominated area west of Baghdad. He demanded the government stop the kidnappings or he would send his own forces to protect the road.

A senior Interior Ministry official, Saadoun Abu al-Ula, confirmed that more than 45 people from the Najaf area were seized but said "it's been going on for the past two weeks -- like two or three people snatched per day."

US officials have also grown alarmed over the rise in Sunni-Shi'ite violence and the role of sectarian militias. Those tensions are now considered a greater threat than the Sunni insurgency to the government of Prime Minister Nouri al-Maliki.

The US military is moving at least 3,700 soldiers from Mosul to Baghdad and is gearing up for a new security operation to wrest control of the capital from Shi'ite militias, Sunni insurgents, kidnap gangs, rogue police, and freelance gunmen.

US officials have described the Baghdad campaign as a "must-win" for Maliki, whose government has been unable to curb the rise in violence since it took office May 20. American troops will work alongside US-trained Iraqi forces.

As part of the campaign against militias, US troops yesterday arrested a Baghdad-area representative of radical Shi'ite cleric Moqtada al-Sadr, whose Mahdi Army is among the most feared armed groups.

The arrest of Sheik Ahmed al-Ashmani was reported by Sadr's staff, which said 10 other members of the cleric's movement were detained. There was no confirmation from the US military.

Meanwhile, gunmen ambushed a minibus carrying employees of a power station to their homes in the Shi'ite district of Sadr City, killing five passengers and wounding six, police said.

A car bomb killed seven people, six of them civilians, in Muqdadiyah, about 60 miles northeast of Baghdad and a flashpoint of Sunni-Shi'ite tensions. Three Iraqi soldiers were killed yesterday evening when a car bomber attacked a checkpoint in the northern city of Tal Afar, the Iraqi Army said.

An Iraqi journalist working for the Iranian government-run Al-Alam television was slain in western Baghdad. Adil al-Mansuri, who was in his 20s, was stopped by gunmen Monday and shot, according to a colleague, Aysar al-Yasiri.

A Sunni Arab politician, Mohammed Shihab al-Dulaimi, was kidnapped yesterday in Baghdad, his associates said.
© Copyright 2006 Globe Newspaper Company.

Describing the main Shi'ite militia, he wrote: "If we are to avoid a descent into civil war and anarchy then preventing the (Mehdi Army) from developing into a state within a state, as Hizbollah has done in Lebanon, will be a priority."

Patey did, however, also say that the situation in Iraq "is not hopeless."

The Foreign Office said it does not comment on leaked documents.

"Every day the capacity of the Iraqi security forces to manage their own security is growing," a spokeswoman said.

The view expressed in Patey's cable reflects pessimism that has settled among senior Iraqi officials as violence has increased in the three months since a new "unity" government took power.

A senior Iraqi government official told Reuters last month that "Iraq as a political project is finished," with the capital split into Sunni and Shi'ite districts and officials working to divide control of the country on ethnic and sectarian lines.

Some 20 buses, accompanied by police vehicles, took off from the southern city of Basra, carrying young men, mostly unarmed members of al-Sadr's Mahdi Army militia. Most were draped in the white shrouds that Muslims use to wrap their dead - a symbol of their willingness to die for Lebanon.

The buses were plastered with pictures of Hezbollah leader Sheik Hassan Nasrallah, who has assumed a hero status in the Arab world. The men waved the yellow flags of Hezbollah and carried banners that read "Here we are Lebanon."

Al-Sadr is one of the most influential Shiite leaders in Iraq. His Sadr Movement party is the second biggest component of the Shiite alliance in Iraq's unity government, which includes Sunni and Kurds.

Shiites were long suppressed during Saddam Hussein's Sunni-majority government. The rivalry between Shiites and Sunnis has now turned into an almost daily cycle of sectarian clashes, bombings, assassinations and mortar attacks on each other's neighborhoods.

On Thursday, gunmen shot to death four people in separate incidents in Baghdad, Amarrah, Mosul and Basra, police said. Also Thursday, the bodies of nine men were found floating in separate places in the Tigris River, police and morgue officials said. At least two bodies were blindfolded, bound and shot.

Meanwhile, a confidential report from Britain's outgoing ambassador to Iraq, William Patey, has warned that the country is sliding toward civil war and is likely to divide eventually along ethnic lines, according to the British Broadcasting Corp. Thursday.

Patey sent the memo to Prime Minister Tony Blair, Foreign Secretary Margaret Beckett and other leading legislators and military commanders, BBC reported.

It said Patey also warned that to avoid a descent into civil war, there must be greater effort directed at policing militia groups, including al-Sadr's Mahdi Army, which he said could develop into "a state within a state," as Hezbollah has done in Lebanon.

On Wednesday, sectarian and political violence claimed at least 53 lives, including 11 young soccer players and spectators who died when two bombs exploded in a field in a Shiite neighborhood of Baghdad. More than 70 people were killed on Tuesday.

The surge in sectarian violence has prompted the U.S. command to send at least 3,700 American soldiers from the northern city of Mosul to reclaim the capital's streets from Sunni insurgents, Shiite militias, rogue police, criminals and freelance gunmen.

U.S. officials have been pressing Prime Minister Nouri al-Maliki, a Shiite, to disband the Shiite militias and make overtures to Sunni insurgent groups.

However, the militias draw strength from the disorder they help create because many Iraqis are losing confidence in the police and army - preferring to rely on gunmen from their own sect for protection.