Insurgents killed two American soldiers Thursday in a roadside bombing west of Baghdad as the United States was reportedly ready to make major changes in its blueprint for handing over power to a new Iraqi government.

The bombing occurred near Khaldiyah (search), 50 miles west of the capital, according to the U.S. command. Two soldiers from Task Force All-American (search) were killed, along with at least one Iraqi, the command said. One U.S. soldier was wounded.

Insurgents also fired a rocket-propelled grenade Thursday at an American convoy in Khaldiyah but the projectile missed, witnesses said.

Those deaths brought to 545 the number of American service members who have died since President Bush launched the Iraq war on March 20. Most of the deaths have occurred after Bush declared an end to active combat May 1.

With casualties mounting in an election year, the Bush administration would like to transfer political power to the Iraqis by the end of June and shift more security responsibility to the U.S.-trained Iraqi force.

Bush wants to end the occupation well ahead of the November presidential election in the United States to minimize Iraq as a campaign issue. However, the formula for establishing a new government remains in dispute.

U.S. and Iraqi officials were awaiting an announcement later Thursday by U.N. Secretary-General Kofi Annan (search) on the feasibility of holding legislative elections here before June 30, as demanded by Grand Ayatollah Ali al-Husseini al-Sistani (search) and others in the influential Shiite clergy.

The Bush administration hopes Annan will say that elections are impossible by June 30 and endorse the idea of extending and expanding the U.S.-picked Iraqi Governing Council so it can take interim control of the country on July 1.

In an interview with the Japanese newspaper Yomiuri, Annan said elections were essential in Iraq but they could probably not be held before the transfer of power.

"There seems to be a consensus emerging that elections are essential and everyone would want elections. But at the same time, there seems to be a general acceptance of the fact that it is not going to be possible to arrange an election between now and the end of June," Annan said in the interview published Thursday.

Rather than hold elections, the United States proposed choosing members of a new legislature by regional caucuses. The lawmakers would then select a government to take power by July 1. However, the caucus idea has little support among Iraqis, who fear the Americans could manipulate the process to ensure their favorites were chosen.

With Washington standing firm on the date for transferring power and dwindling support for the caucuses, a senior U.S. official said Wednesday in Washington that the Bush administration was considering a plan to extend and expand the U.S.-appointed Governing Council so it can take temporary control of the country on July 1.

The council would then rule the country until a legislature could be elected, the U.S. official said on condition of anonymity.

On Thursday, Ahmad al-Barak, a Shiite council member and coordinator of the Iraqi Bar Association, said after meeting with al-Sistani in Najaf that the Shiites were hoping for an early election but would be willing to wait a few more months if Annan recommends against a vote before June 30.

"I think that elections can be held after five months from now and in that case we have no problem," al-Barak told reporters. "Power could be transferred to the Iraqi people through the Governing Council or any other body which will take the responsibility to make the right preparations for the elections."

Other Shiites have said that any expansion of the Governing Council must respect the current alignment of power. The Shiites, believed to make up about 60 percent of Iraq's 25 million people, hold 13 of the 25 council seats.

In Baghdad, a Sunni council member, Samir Shaker Mahmoud, said he also believed the plan to expand and extend the Governing Council was a possible solution.

"I think this option is available and I know several members of the Governing Council who think this is feasible, it's possible," he said. "But of course all members of the council believe that elections, credible elections, must be conducted as soon as possible."

Elsewhere, a roadside bomb exploded Thursday in Baqouba, 35 miles northeast of Baghdad, missing U.S. vehicles but wounding an Iraqi policeman, witnesses said. On Wednesday, U.S. troops arrested seven people in Baqouba suspected of links to Al Qaeda but gave no further details.

The attacks followed a mortar barrage Wednesday evening against the U.S. base at Abu Ghraib prison (search) on the western edge of Baghdad. The U.S. command said attackers fired 33 mortars and five rockets between 6:30 p.m. and 6:50 p.m., but only one soldier was slightly injured.

Abu Ghraib was one of Iraq's most notorious prisons during the rule of Saddam Hussein, who detained, tortured and executed many regime opponents there. The U.S. military uses the prison to house coalition opponents and former regime members.

The latest incidents followed a deadly suicide attack against a Polish-run base south of Baghdad on Wednesday that killed 10 Iraqis and wounded more than 100 people, more than half of them coalition soldiers.