Iraqi Guerrillas Attack Police Station

Guerrillas attacked a police station in central Iraq on Thursday, wounding two policemen and four civilians as U.S. forces captured two people suspected of being in recent contact with Saddam Hussein and leading resistance against coalition forces.

In south-central Baghdad, attackers detonated a roadside bomb near an American military vehicle, witnesses said. Smoke billowed from the tracked, armored vehicle while helicopters clattered overhead and U.S. soldiers cordoned off the area.

"Everybody got out in time," said Sgt. James Thompson, a soldier at the scene.

Also, an overnight raid in Saddam's hometown of Tikrit netted several illegal weapons.

Two rockets struck the Ramadi Police Directorate (search), 100 miles west of Baghdad, as officers gathered inside to receive their monthly salaries, said Maj. Samir Habib.

Meanwhile, soldiers captured former Brig. Gen. Daham al-Mahemdi (search) in Fallujah, 30 miles west of Baghdad. Al-Mahemdi is suspected of keeping in indirect contact with Saddam, while directing guerrilla attacks on U.S. soldiers.

In Baghdad, Iraqi police and U.S. troops seized a close aide to radical Shiite Muslim cleric Muqtada al-Sadr (search), who opposes the U.S. occupation.

Amar Yassiri was seized Wednesday in Sadr City, a poor and mainly Shiite district in eastern Baghdad that serves as al-Sadr's main power base.

Brig. Gen. Mark Kimmitt said Yassiri had been arrested on suspicion of involvement in an Oct. 12 ambush on U.S. troops in Baghdad in which two soldiers died.

Al-Sadr, a harsh U.S. critic, enjoys significant support among Iraq's underprivileged and young Shiites. Two months ago, he announced plans to form a rival government but abandoned the idea after drawing little support.

But on Thursday, a spokesman for al-Sadr denied that Yassiri was in any way connected to the cleric.

"Amar Yassiri does not represent us in any way now," said Sheik Fouad Hassan. "We would like to confirm that we have nothing to do with the killing of the two soldiers."

Hassan said Yassiri had been the head of a security committee formed in Sadr City -- a mainly Shiite district in eastern Baghdad -- in the chaotic aftermath of the fall of Saddam's regime. Yassiri's role ended when the Iraqi police were reconstituted, Hassan said.

Thursday's attacks come just one day after officials said they were considering creating a specialized Iraqi paramilitary battalion to help fight the opposition to coalition forces that has been launching daily attacks U.S. troops.

Ramadi, a town on the main highway between Iraq and Jordan, is part of the so-called Sunni Triangle -- a region north and west of Baghdad that is a stronghold of support for the toppled Iraqi president and has seen fierce resistance to the U.S.-led occupation.

U.S. counterinsurgency operations have come under increasing criticism recently, with many analysts warning that the U.S. military was risking alienating significant segments of Iraqis through heavy-handed military responses to hit-and-run attacks by the guerrillas.

The new plan to create a specialized Iraqi tactical unit capable of conducting independent operations appears to be aimed at bolstering counterinsurgency efforts and replacing U.S. combat troops in the anti-guerrilla role with Iraqi forces.

American officials in Baghdad and Washington said Wednesday that the new 1,000-member unit would be formed by uniting fighters from five Iraqi political parties under the joint leadership of the U.S. military and the emerging Iraqi Civil Defense Corps.

If created, the paramilitary unit would represent a significant policy reversal by the United States, which previously declared private militias illegal and called on Iraqi political leaders to disband them.

The Pentagon's policy chief said Wednesday the United States would welcome militia members into the Iraqi security forces as long as they agreed to drop their previous party affiliations.

"We are willing to take people into these forces as long as when they come in they are not operating as members of these other (militia) forces," U.S. Undersecretary of Defense for Policy Douglas Feith said in Washington.

The militia members would be recruited as individuals, not as intact units, Feith said.

"We are not looking to preserve militias as such," Feith said.

The current president of the Iraqi Governing Council, Abdel-Aziz al-Hakim, a Shiite Muslim, said the idea of a joint militia was a good one. He said the country's five or so individual militias have won credibility for fighting Saddam's regime for more than 20 years and could root out that regime's remnants now.

"At this stage, we should try to make use of any force, any tribal clan and any individual that can help," he said, adding that the militias should be centrally controlled, as the Americans have stipulated. "They will have a role to play in the fight against terrorism," he said.

In Brussels, U.S. Secretary of State Colin Powell urged NATO on Thursday to consider playing a wider role in Iraq, adding to a reviving debate on possible direct military involvement by the Atlantic alliance.

Although the alliance's involvement is limited to offering logistical support to the Polish-led division in southern Iraq, 18 of the 26 current and soon-to-be NATO members have individually sent troops to the country.

Saddam's Stash

Meanwhile, a London-based Arabic newspaper quoted Iraq's former planning minister as saying that Saddam might still have stashed away in foreign banks tens of billions of dollars that he skimmed for years from oil revenues.

Jewad Hashem, Iraq's planning minister in the late 1960s and early '70s who now lives in Canada, said that 5 percent of oil revenues was ordered deposited abroad in accounts under Saddam's supervision when Iraq nationalized its oil industry in 1972.

Hashem said that Iraq's former Revolutionary Command Council issued the decree to create a sort of war chest for Saddam's Baath Party. There was no way to independently confirm his story.

International efforts are under way to track accounts around the world in the name of Saddam, the Baath Party and other former Iraqi officials.

Also, quoting a letter purportedly from Saddam and obtained by ABC News, the network reported Wednesday that Saddam withdrew more than $1 billion from Iraq's central bank hours before U.S. forces invaded Baghdad, and some of that cash may be funding the attacks against coalition forces.  

But senior defense officials told Fox News that they have no knowledge of this letter.

It's been no secret that Saddam took that cash, and Pentagon officials have long suspected that this money was used to fight U.S. forces.

A number of large piles of money have already been found in raids where guerrillas have been operating.

Fox News' Bret Baier, Ian McCaleb and The Associated Press contributed to this report.