U.S. Steps Up Hunt for Enemy Forces in Iraq

The U.S. military's hunt for Saddam Hussein loyalists and terrorists took a deadly turn Monday when three Iraqis died and two American soldiers were injured in a firefight.

The shootout in the northern city of Mosul (search) came amidst a new U.S. effort to respond to attacks on soldiers, and as published reports suggested Saddam may have told his American captors where he cached billions of dollars before his ouster.

"Saddam has started to give information on money that has been looted from Iraq and deposited abroad," Iyad Allawi (search), a member of the Iraqi Governing Council, told the London-based Arabic newspaper Asharq al-Awsat. "Investigation is now concentrated on his relationship with terrorist organizations and on the money paid to elements outside Iraq."

The U.S.-appointed council estimates that the Iraqi dictator seized $40 billion while in power and has been searching for the money in Swiss, Japanese, German and other banks, Allawi told Asharq al-Awsat and another newspaper, Al-Hayat.

In Mosul, suspected Islamists lobbed a grenade and fired on U.S. soldiers searching homes for enemy forces.

Sgt. Robert Woodward of the 101st Airborne Division, which has its headquarters in Mosul, said the military suspected the attackers belong to Ansar al-Islam (search), a militant Islamic group that operates in northern Iraq and is believed to have ties to the Al Qaeda terrorist network.

The American troops were involved in a "cordon-and-knock operation. We knock on the door and give them a chance to surrender, but they fired small arms and threw a hand grenade at soldiers, who returned fire and entered the building and cleared it," Woodward said.

Soldiers seized $30,000 in Iraqi dinars and a cache of arms including two grenade launchers, 11 rocket-propelled grenades, eight hand grenades, two assault rifles with 1,100 rounds and a 9-mm submachine gun, he added.

The attack left three Iraqi men dead and two American soldiers wounded but in stable condition, Woodward said.

Six people remaining in the house were turned over to Iraqi police — one man, two women and three children who could not be left unsupervised, he said.

The 101st has over the last month mounted a fresh offensive against enemy forces. Officials told Fox News they had detained as many suspected guerrillas in the past month as they had in the previous four months combined.

On Sunday, roadside bombs killed two U.S. soldiers and two Iraqi children in central Iraq, a day after strikes in the holy city of Karbala targeted America's coalition partners.

The Karbala attacks — multiple, coordinated strikes involving mortars, machine guns and a car bomb — claimed six more lives Sunday, raising the death toll to 19.

In central Baghdad on Sunday, a bomb planted beside a road killed two Iraqi children and an American soldier and wounded 14 people, said U.S. Army Sgt. Patrick Compton of the Army's 1st Armored Division. The wounded include five American soldiers, their Iraqi interpreter and eight members of the Iraqi civil defense corps.

"It was a bad one," Compton said. "It's a real densely populated area of town."

Attackers detonated another roadside bomb later Sunday as a U.S. convoy was traveling on a road near Fallujah, west of Baghdad, killing another American soldier and wounding three, the U.S. military said. The latest deaths bring the number of American combat deaths since the invasion in March to 325.

Despite the attacks, U.S. military officials say the number of rebel assaults has dropped from about 50 a day in mid-September to an average of 14 or 15 a day, rising to 18 on Christmas Day.

The Karbala attacks on Saturday were the biggest since the Dec. 13 capture of Saddam Hussein.

Bulgaria declared Tuesday an official day of mourning for six Bulgarian and two Thai soldiers killed in the attacks, which destroyed the Bulgarians headquarters in Iraq and appeared designed to undermine the resolve of U.S. allies soldiering in Iraq.

Six coalition soldiers, six Iraqi police officers and a civilian died Saturday. On Sunday, a Bulgarian lieutenant and five Iraqis wounded in the attacks died in the hospital, the Polish news agency PAP reported.

In the northern city of Kirkuk, police said they arrested four foreigners Sunday night who could be connected with attacks in that city. Police chief Saad al-Ubaidi said two Egyptians, one Afghan and one Iranian, who all had fake passports, were handed over to U.S. troops.

"They are strangers in the city ... believed to have links to the bombings in Kirkuk and its suburbs and to have links to the resistance" to the U.S.-led occupation, he told The Associated Press.

Thailand announced Monday it will send an additional 30 troops to provide security for its other troops. Prime Minister Thaksin Shinawatra said Thailand would fulfill its one-year commitment to the United States and would "not run away from a friend."

Officials said Sunday they arrested five Iraqi suspects in the Karbala attacks. More than 130 Iraqis and several dozen coalition soldiers were injured, officials said, including five Americans and 26 Bulgarians. Six Bulgarians were in serious condition, PAP reported.

The Thai and Bulgarian troops form part of a multinational force of 9,500 soldiers under Polish command.

Fox News' Dana Lewis and The Associated Press contributed to this report.