BAGHDAD, Iraq – A car bomb shattered a street outside the walled Jordanian Embassy (search) on Thursday, killing at least 11 people -- including two children -- and raising concerns that Iraq's violence could be broadening from resistance to the U.S. occupation toward a terrorist insurgency.
More than 50 people were wounded by the explosion, the deadliest attack on a non-military target since Baghdad (search) fell to American forces April 9. The blast set cars on fire, flung the hulk of one vehicle onto a rooftop and broke windows hundreds of yards away.
Elsewhere in Baghdad, gunmen attacked a U.S. patrol on a busy shopping street, sparking a fierce hours-long gunbattle between Iraqis with rocket-propelled grenades and assault rifles and Americans with armored Bradley fighting vehicles.
• Map: Recent Developments in Iraq
• Photo Essay: Car Bomb Attack
Two U.S. soldiers were reported killed Wednesday night in another Baghdad firefight -- the first American combat deaths since late Friday. Guerrilla attacks have now killed 55 U.S. soldiers since May 1, when President Bush declared an end to major combat.
Lt. Gen. Ricardo Sanchez (search), commander of coalition forces in Iraq, said U.S. troops would have to stay in Iraq for two years at an "absolute minimum" -- and "probably longer" -- to give Iraqis time to develop a new army of at least three motorized divisions capable of defending the country.
"What this shows is that in fact we have some terrorists that are operating here," Sanchez said at a news conference. "It shows we are still in a conflict zone."
Witnesses outside the Jordanian compound in western Baghdad said a bomb was left in a parked minibus or sports utility vehicle and apparently was detonated by remote control.
At least 11 dead, including two small children, were taken to Baghdad's morgue. A wounded policeman said at least four officers were killed. Doctors said more than 50 people were wounded, including six Jordanians.
The attack on the embassy was a new kind of violence in Iraq, where guerrillas have been targeting American troops with bombs, grenades and Kalashnikovs.
Officials in Amman, the Jordanian capital, said evidence at the bombing scene suggested the attack was an "orchestrated terrorist attack" aimed at Jordan.
At the Pentagon, Lt. Gen. Norton Schwartz, director of operations for the Joint Chiefs of Staff, said U.S. forces were investigating whether foreign terrorists were involved or whether the attack was carried out by Saddam Hussein's Fedayeen forces.
"This clearly was an action targeted at innocents. And we have obviously the presence of terrorists in Iraq, along with the Baathists that have resisted us, and foreign fighters, and so on," Schwartz said, calling Iraq "a complex environment."
Iraq's U.S.-appointed Governing Council issued a statement blaming members of Saddam's former government but making no mention of terrorism.
Tensions between Jordan and Iraq have been high because of the Jordanian government's support for the U.S.-led war to oust Saddam's regime. Jordan also gave asylum last week to two of Saddam's daughters.
Shortly after the blast, young Iraqi men entered the embassy, chanting anti-Jordanian slogans and destroying photographs of Jordanian King Abdullah II and his late father, King Hussein. American soldiers and Iraqi police dispersed them.
One Iraqi said the young men hadn't been angry at Jordan but became enraged when an embassy guard shot at them when they first went into the compound after the bombing to help the wounded.
Jordan's Petra news agency said Secretary of State Colin Powell promised Jordan's foreign minister that U.S. troops would protect the embassy. But Sanchez said it was up to individual nations and Iraqi police to guard diplomatic missions.
In Washington, Powell said the attack strengthened U.S. resolve to "unite the world in this campaign against terrorism."
"The terrorists need to know that we will not be deterred," he said. "We are ever more determined to go after them wherever they are until this scourge is dealt with."
Hours after the bombing, an intense gunbattle broke out on Outer Karada Street, one of Baghdad's most crowded thoroughfares, with about two miles of shops selling everything from electronics to shoes.
The attack began with an explosion that wrecked an Army Humvee parked in the median strip. Shots then rang out from a nearby office building, and U.S. soldiers returned fire at the two-story structure.
Within minutes at least 20 Humvees and eight Bradley fighting vehicles joined the fight, pouring in fire from heavy machine guns that set the building ablaze while three helicopters hovered overhead.
The Americans stormed the building after letting about 20 people flee with their hands in the air. The soldiers emerged five minutes later without any prisoners.
Spc. Nicole Thompson of V Corps, the Army unit controlling Baghdad, said two Americans were injured in the fight.
U.S. Central Command said the two American deaths Wednesday night occurred during a firefight in the Al Rashid section of Baghdad, but released no details.
The Pentagon identified one of the U.S. casualties as Staff Sgt. Brian R. Hellermann, 35, of Freeport, Minn. The identity of the other was being withheld until relatives could be notified.
Sanchez said American forces are moving away from large-scale sweeps looking for Saddam and other former regime leaders, operations that have angered some Iraqis. He said troops instead are focusing on raiding specific targets.
The Army's 4th Infantry Division (search), operating north of Baghdad in the area where Saddam is believed to be hiding, conducted 24 raids, arresting 49 people and killing two in the 24-hour period ending Thursday morning, according to its commander, Maj. Gen. Ray Odierno.
Four of the detainees were characterized as "targeted individuals," but their identities were not released.
In Tikrit, Lt. Col. Steve Russell said one of the four organized resistance cells and paid and armed fighters for attacks on U.S. forces. Two others -- both former Iraqi generals -- organized guerrilla attacks nationwide, and the fourth was a Fedayeen militia ringleader, he said.
At one of the raids, Apache attack helicopters circled as about 100 soldiers and four tanks surrounded a hotel. The troops led out 39 men, questioned them, and released all but one.
But the freed men got a parting warning from Russell: "If you fight against your government, we will hunt you down and kill you."