U.S. soldiers seized the governor's office Thursday in the holy city of Najaf (search), wresting control from Shiite militiamen loyal to a radical cleric in battles that left an estimated 40 insurgents dead.

In Baghdad, a homicide car bomber killed five Iraqi civilians and an American soldier at the edge of the heavily guarded Green Zone that houses the U.S. headquarters. The blast wounded 25 people, including two U.S. soldiers.

Amid concerns that U.S. troops were about to move directly against anti-American cleric Muqtada al-Sadr (search), his militiamen dug in in Najaf, taking positions behind earthen mounds leading into the city center and firing a barrage of mortar shells and small arms fire at the U.S. base late Thursday. American soldiers responded with 120mm mortar fire.

Gunmen took cover behind buildings as American helicopters flew overhead. An increased number of fighters were seen in the city center.

"We will fight until the last drop of our blood," said Dhia Shami, as he stood behind a dirt barricade.

"We expect the Americans to retreat," said fellow militiaman Malek Holeicha. "We are fighting for our faith. They don't have any faith."

At the city's Imam Ali shrine, one of the holiest sites in Shiite Islam, a coffin wrapped in an Iraqi flag was brought in — apparently one of the dead from the fighting.

"This is a martyr for Muqtada," mourners chanted.

The Najaf fighting came as chief U.S. administrator L. Paul Bremer (search) announced the appointment of Adnan al-Zurufi as governor of Najaf province, a step that is part of the campaign to regain control of the area from al-Sadr's militiamen. His al-Mahdi Army seized government buildings and police stations throughout the province on April 4.

The United States is planning to hand some sovereignty to a transitional Iraqi government June 30 and is looking to end al-Sadr's uprising, which has left parts of southern Iraqi outside of coalition control.

U.S. troops have been stepping up their assaults on al-Sadr's followers, raiding offices and buildings where weapons are stored in several southern cities in increasingly bloody skirmishes. Moderate Shiite leaders have called on al-Sadr's militiamen to abandon Najaf, isolating the cleric and making it easier for U.S. forces to act against him.

On Thursday, U.S. forces moved to outlying areas of Najaf, drawing militants from the city center and enabling other troops to seize the two-story governor's office without resistance.

An estimated 40 militiamen were killed in gunbattles outside the city, said Capt. Roger Maynulet, a tank company commander with the Army's 2nd Armored Cavalry Regiment.

After the soldiers took the building, heavy gunfire was heard near the governor's office and smoke was seen rising. Gunmen fired from rooftops as motorists fled through deserted streets, honking their horns.

One U.S. convoy of Humvees leaving the area was ambushed twice in 10 minutes by insurgents firing rocket-propelled grenades and automatic rifles from rooftops. An AP reporter who witnessed the attacks saw five militants who appear to have been killed in retaliatory fire.

Elsewhere, coalition troops exchanged gunfire with dozens of al-Sadr militiamen in Karbala, 50 miles north of Najaf. Militiamen took ambush positions behind cars and a discarded desk a few hundred yards from the city's main Shiite shrines.

A witness told Associated Press Television News that troops fired on the insurgents and ended up destroying four buses of Pakistani pilgrims, which were seen burning. The witness said "three or four" Pakistanis had been killed.

"We're going to demolish them — and even Bush," shouted one masked man, waving a Kalashnikov. "We're going to win, by God's will."

Militiamen also fired on Italian troops farther south near Nasiriyah, wounding one, the Italian military said.

In the past two days U.S. soldiers estimate they have killed about 80 militiamen. One U.S. soldier was killed Wednesday.

"I think we are going to gain momentum from now on," said Lt. Michael Watson, a platoon leader with the 2nd Armored Cavalry Regiment in Najaf.

The Baghdad bomb exploded outside a 3-foot-high concrete blast wall that protects a U.S. checkpoint.

The U.S. soldier slain by the bomb was the 21st U.S. serviceman killed in Iraq in May. The homicide bomber also died.

An Internet statement signed by a group linked to Al Qaeda claimed responsibility.

The statement, on a Web site known for militant Islamic messages, was signed by the military wing of the "Monotheism and Jihad Group," which is believed led by Abu Musab al-Zarqawi. The Jordanian is wanted by the United States for allegedly organizing militants to fight U.S. troops in Iraq on behalf of Al Qaeda. The statement's authenticity could not be confirmed.

Also Thursday, the U.S. military said two U.S. soldiers were killed and two were wounded when a roadside bomb exploded in Baghdad just before midnight Wednesday.

Meanwhile, a blindfolded man described as an Iraqi-American being held hostage in Iraq was shown pleading for help on an Arab TV station.

The man, speaking English, gave his name as Aban Elias and said he was from Denver.

"I am a civil engineer working here in Baghdad," he said, adding that he worked for the Pentagon.

Elias, shown on Dubai-based Al-Arabiya TV, appealed to Islamic associations to work for his release.

With the tape came a statement from a previously unknown group calling itself "The Islamic Rage Brigade." The group said Elias was kidnapped on May 3. It made no demands.