A policeman who witnessed the helicopter crash, which occurred about 50-km west of Baghdad near the volatile town of Falluja, said the aircraft was shot down, although the US military could not immediately confirm that.

"We were in a joint patrol with US troops to remove land mines and I saw a helicopter hovering in the sky which was hit by a missile," policeman Mohammad Abdul Aziz said.

"It was split into two and went down in flames."

A US military spokeswoman said the helicopter, an OH-58 observation chopper, came down around 12:50pm local time near Falluja but had no further details. She said the cause of the crash was under investigation.

Reuters television pictures showed pieces of the aircraft scattered across a ploughed field. US forces cordoned off the area as helicopters flew overhead keeping watch.

Insurgents have shot down several US helicopters in recent months, including three Black Hawks and a Chinook transporter in November, killing a total of 39 US soldiers.

Falluja, in the heart of the area dubbed the Sunni triangle, has been the site of near-constant attacks on US forces since the overthrow of Saddam Hussein last April. US officials blame the attacks on insurgents loyal to the former regime.

Ethnic tensions

In Kirkuk, at least one man was killed and another was wounded overnight as police and protesters clashed in the ethnically divided city, where Kurds, Arabs and Turkish-speaking Turkmen are all bidding for more political say.

Earlier this week, at least five people were killed when gunfire erupted as Turkmens and Arabs faced off with the mainly Kurdish police during a protest against a plan to include Kirkuk in a Kurdish administrative unit.

Kirkuk police commander Shirko Shakir said a protest late on Thursday led to an exchange of gunfire with police, who detained a wounded Arab gunman. Another man, whose ethnicity Shakir declined to specify, was found killed in the area where the latest protest and clashes occurred, he said.

"From the amount of shooting we assume that there are more wounded and killed whose bodies they took away, and we are watching hospitals and private doctors for them," he told Reuters, blaming the violence on provocateurs loyal to Saddam.

"This one had 'Saddam' tattooed on his arms and hands, and that area has pockets of mercenaries and Fedayeen," he said, referring to the ousted strongman's militia.

Arabs and Turkmen in Kirkuk are bitterly opposed to a plan by Kurds on Iraq's US-appointed Governing Council to grant significant autonomy to a Kurdish area based in three provinces they wrested from Baghdad after the 1991 Gulf War, and which would include Kirkuk.

In Baghdad, the US military confirmed that eight people were killed and more than 30 wounded by a New Year Eve car bomb blast at a popular restaurant in a wealthy district of the city. Three Western journalists were among the wounded.

The blast has heightened fears that guerillas are shifting attacks to softer targets after initially focusing on coalition forces before moving on to targeting Iraqi police and others seen to be cooperating with the occupation.