Three guards were killed and several others wounded in a bomb blast Sunday outside the house of one of the most prominent Shiite clerics (search) in Iraq.

The gas cylinder bomb exploded along the outside wall of the home of Mohammed Saeed al-Hakim (search) in Najaf, one of the holiest cities for Shiite Muslims.

The explosives blew up just after Sunday's noon prayers, killing the three guards and wounding family members, a relative of the cleric and member of the Iraqi Governing Council said.

The high-ranking cleric suffered scratches on his neck, according to Abdel-Aziz al-Hakim, a member of Iraq's U.S.-chosen governing council and leader of the former armed wing of the Supreme Council for Islamic Revolution (search) in Iraq. The Supreme Council for Islamic Revolution was headquartered in Iran before the war. 

Both al-Hakims are members of one of the most influential families in the Shiite community, and have worked closely with coalition forces since the toppling of Saddam Hussein.

Though a motive for the blast wasn't immediately clear, some speculate that the hit near the cleric's home was partly in retaliation for his family's involvement with the coalition. But it could also be just the latest round of fighting among religious factions in Iraq, all of whom are struggling for control.

The fresh violence came as the U.S.-led coalition began quietly recruiting former Iraqi spies to work with American intelligence officials in the country. 

Iraqis with ties to Saddam Hussein's once-feared Mukhabarat (search) intelligence agency said Iraqi agents would work with Americans inside Saddam's former presidential palace where the American-led coalition has its headquarters. 

"It was obvious they would have to turn to the Mukhabarat, they knew everything in this country," said one of the Iraqis, who refused to be named. The Iraqis, closely linked to the Mukhabarat service, spoke only on condition of anonymity.

The Iraqi sources said U.S. authorities were recruiting key ex-members of Saddam's security service to expand intelligence gathering and root out the resistance that has peppered U.S. forces with guerrilla attacks and now resorted to terror bombings.

The Iraqi sources said the U.S. recruitment of about 100 former intelligence higher-ups had been in progress for more than two weeks.

"They (the Americans) couldn't hope to pacify such a big country as Iraq without the Mukhabarat. And the Mukhabarat men, they need money now," said another Iraqi who worked closely with the deposed regime's intelligence operation.

The Mukhabarat was the foreign intelligence branch of Saddam's regime and its very name struck fear in the hearts of ordinary Iraqis. 

L. Paul Bremer (search), the top U.S. official in Iraq, acknowledged Sunday the need for better information and more Iraqi cooperation to stabilize the situation.

"What we are doing is trying to engage more Iraqis in the fight," he said on "Fox News Sunday." "We have now almost 60,000 Iraqis in the police force, in the border police, in the new Iraqi army, in the Iraqi civil defense force, all of them working together."

He doesn't believe adding more ground troops is the answer, however.

"It's not a question of more troops," he said on ABC's "This Week." It's a question of being effective with our intelligence, getting more Iraqis to help us."

He said progress has been made in getting that Iraqi cooperation.

"We are getting information from Iraqis now in a way we were not, even a month ago," he said on "Fox News Sunday." 

Coalition spokesman Charles Heatly, responding to questions about the recruitment of former Saddam intelligence officers, said U.S. military intelligence and civilian authorities were "not leaving any stone unturned to uncover the people who are conducting attacks against the Iraqi people and the coalition forces."

One Iraqi source told the AP: "Saddam had some really good agents in Tehran (Iran) and Damascus (Syria). They should be good for the Americans."

But Gen. Richard Myers, the top U.S. military officer, told CBS on Sunday he was unaware of any recruitment of former Iraqi intelligence agents.

However, he added: "The United States will not use former members of these organizations that were part of the torture, the death, the degraded treatment of the Iraqi people under the Saddam regime."

"That does not mean we do not want the Iraqi people to help. It just has to be the right kind of Iraqi people helping," he told the TV network.

The Iraqi spy recruitment efforts were first reported in Sunday's Washington Post. 

Officials have speculated that Iraqis inside the country helped terrorists from other borders carry out this week's hit on the U.N. headquarters in Baghdad, but no one has claimed official responsibility for the attack.

It's hard to tell if more terrorists are in Iraq now than before the war, but a "large number" of foreign terrorists — perhaps several hundred — have come into Iraq and some are returning who had been there before the war, Bremer said in his Sunday television news show circuit.

Bremer also reiterated a Bush administration claim of pre-war ties between Saddam's regime and Al Qaeda.

In Baghdad, the International Committee of the Red Cross said Sunday it was scaling back the number of people working in Baghdad after receiving warnings that the organization might be a terror target.

Nada Doumani, spokeswoman for the ICRC in Baghdad, said the organization had gradually been cutting back the size of its staff since a Sri Lankan aid worker was killed in an attack on a convoy July 22 south of Baghdad.

She said the organization would keep about 50 workers in the country, with those being pull out leaving positions in Baghdad. She said she was staying, but declined to give specific numbers of those being withdrawn.

"We are concerned about the security of the staff working with us and the people who come to visit us. It seems some groups are not willing to let us work normally," Doumani said.

"We are very upset because our services are badly needed," she said, adding that the threat against the agency wasn't specific but involved warnings that they could be a target.

Agencies in Iraq have become especially concerned with security since the suicide truck bombing Tuesday of the U.N. headquarters in Baghdad in which at least 23 people were killed, including the chief U.N. envoy in Iraq, Sergio Vieira de Mello.

As for the bombing outside cleric Mohammed Saeed al-Hakim's home, the al-Hakim family believes terrorists are responsible.

"Obviously terrorist groups who belong to the former regime are behind this incident," Abdel-Aziz al-Hakim said. He said Najaf residents rushed to the ayatollah's house after the explosion, which shattered windows and damaged a wall.

Iraqi newspapers had reported last week that the cleric had received threats against his life. He was also one of three top Shiite leaders threatened with death by a rival Shiite cleric shortly after Saddam was toppled April 9.

A day after Saddam's ouster, a mob in Najaf hacked to death a Shiite cleric who had recently returned from exile. Abdul Majid al-Khoei was killed when a meeting called to reconcile rival Shiite groups erupted into a melee at the Shrine of Ali, the third most important Shiite religious site after Mecca and Medina in Saudi Arabia.

Shiites make up some 60 percent of Iraq's 24 million population.

Mohammed Saeed al-Hakim, in his late 60s, holds the highest theological title in Shiite Islam -- Ayatollah al-Uzma, which means Grand or Supreme Ayatollah. He was detained by Iraqi authorities in the 1980s because of his opposition to and criticism of Saddam.

Before the beginning of the U.S.-led invasion of Iraq in March, most Shiite religious leaders in Najaf, including al-Hakim, were put under house arrest. Shortly after the collapse of Saddam's regime, al-Hakim's office went back to work, dispensing religious advice to residents.

He has many followers among the world's 100 million Shiite Muslims and representatives and offices in countries with Shiite populations.

The Associated Press contributed to this report.