US Marine Major TV Johnson told reporters the mortar attack had targeted a military base two hours drive from Falluja, the flashpoint Sunni city some 30 miles west of Baghdad, but would give no further details.

Two US soldiers were killed in northwest Baghdad and another died when guerrillas detonated a roadside bomb and fired assault rifles at a US base near the northern oil city of Kirkuk.

After April became the bloodiest month for US troops in Iraq with 129 combat deaths, American commanders were able to report good news when Hamill, a trucker, ran into the arms of a US patrol close to Saddam Hussein's home town of Tikrit.

"He had an opportunity to escape, saw some US forces and made his dash," General Richard Myers, chairman of the US Joint Chiefs of Staff, told Americans on breakfast television.

UPSURGE IN VIOLENCE

In April's upsurge in violence, soldiers from other countries in US-led forces and foreign civilians were also killed and more than two dozen foreigners were kidnapped, jeopardising transport, construction and oil projects key to US efforts to win hearts and minds in Iraq.

Three Italian civilians and a US soldier remain hostages. No new kidnappings have been reported for nearly two weeks.

Hamill's wife Kellie said: "I feel wonderful. It's the best feeling I've had. I am so ecstatic and I just want to thank everybody that has prayed and sent their prayers to us."

Pictures of Hamill, 43, as a hostage joined those of coffins of dead American soldiers under the Stars and Stripes as unwelcome images for President George Bush as he campaigns for re-election in November.

Film of Hamill free may help offset the latest bad news photographs from Iraq -- US soldiers abusing prisoners at a Baghdad jail -- that has outraged opinion in the Arab world.

Hamill was seized when his convoy was attacked and destroyed on a main highway out of Baghdad on April 9. Two fellow employees of the US company Halliburton's subsidiary Kellogg, Brown and Root are still missing. So are several US soldiers.

Hamill, a Mississippi farmer who was in Iraq to earn more money, was filmed by a television crew as he was driven away from the scene of the ambush by masked gunmen.

THREAT TO KILL

They released a video later threatening to kill or maim him if US forces did not lift their siege of Falluja, where there has been fierce fighting with guerrillas.

US forces have pulled back a few kilometres (miles) from their original siege lines and allowed hundreds of former Iraqi soldiers under the command of a former general in Saddam's feared Republican Guard to restore order in the city.

Myers repeated what US commanders have been saying for two days -- that US Marines retain overall control of Falluja, and that General Jasim Mohamed Saleh's past will be investigated before his role becomes more permanent.

Saleh appeared to be at odds with US officials Sunday when he denied there were any foreign fighters among the 2,000 or so guerrillas Washington believes have been holding the city.

"There are no foreign fighters in Falluja," he said.

US officials say there are 200 or more foreign fighters, some of whom may have ties to Osama bin Laden's al Qaeda.

For a second day, former Iraqi soldiers on patrol in Falluja turned a blind eye to gunmen celebrating "victory."

US officials say turning to Saleh is a possible way of bringing about what they call an Iraqi solution to the standoff with the guerrillas in Falluja, but have warned that the Marines remain poised to resume an offensive if necessary.

SADR STILL HOLED UP

US-led forces are also struggling to deal with another flashpoint town, the southern Shi'ite holy city of Najaf where radical cleric Moqtada al-Sadr has taken refuge with thousands of his Mehdi Army militia.

Suspected militiamen fired mortar bombs and grenades at U.S. forces overnight. There were no reports of casualties.

Sadr is wanted by US forces and Iraqi judges in connection with the murder of a rival Shi'ite cleric a year ago.

His followers rose up in several towns and cities last month after one of his aides was arrested for an alleged role in the murder, but the uprising has largely died down.

However, his militia still controls Najaf, nearby Kufa and Kerbala.

Tribal representatives and Najaf's police chief held talks Saturday with Sadr aides in an attempt to find a peaceful solution. But a Sadr aide held out little hope of success.

The latest US combat deaths take to 552 the number of American troops killed since US-led forces invaded Iraq in March last year to oust Saddam.

Fijian television said two Fijian security guards were among civilians killed at the weekend.