Bombs rocked Baghdad (search) and a U.S. base in northern Iraq on Tuesday, killing at least 14 Iraqis and wounding dozens of people, including two American soldiers. Militants loyal to a radical Shiite cleric clashed with U.S. forces in Baghdad and a Shiite holy city to the south.

A series of explosions rolled across Baghdad even as a new, post-occupation government for Iraq was announced, with Ghazi Mashal Ajil al-Yawer (search), a critic of the U.S.-led occupation, named as president.

In the largest blast, a car bomb exploded outside the offices of the pro-American Patriotic Union of Kurdistan, near the headquarters of the U.S.-run coalition, killing three and wounding 20.

The explosion sent a mushroom cloud of dust and debris rising over the Green Zone (search). U.S. jets and Army helicopters roared over the city.

The blast ripped through the building in the early afternoon, only a half hour after about 400 people left a party celebrating the 29th anniversary of the founding of the PUK, whose militia fought alongside American soldiers in the invasion that toppled Saddam Hussein (search) last year.

Party leader Jalal Talabani was not in the office when the blast occurred, a party spokesman said.

Outside the capital, a roadside bomb exploded near the U.S. military base, killing 11 Iraqis and wounding 23, near Beiji, 155 miles north of Baghdad. Two 1st Infantry Division soldiers were also wounded, the military said.

U.S. officials say insurgents will step up attacks in the days leading to the June 30 transfer of sovereignty from the U.S.-led occupation authority to the interim Iraqi government.

The new prime minister, Iyad Allawi, told a ceremony announcing the new government that Iraqis, "like other peoples of the world," do not want to live under foreign occupation but still will need American and other multinational forces "to help in defeating the enemies of Iraq."

Despite the talk of stability and a new beginning for Iraq, violence continued in widely scattered parts of this country.

American troops fought Shiite militiamen loyal to radical cleric Muqtada al-Sadr (search) in the Shiite neighborhood of Baghdad Sadr City and in Kufa, where Shiite leaders have been struggling to save a shaky cease-fire.

In Sadr City, militiamen fired rocket-propelled grenades at U.S. soldiers in sporadic clashes that reverberated along the winding alleys. It was not known if anyone was hurt in the exchanges.

The U.S.-appointed governor, Adnan al-Zurufi, said coalition authorities proposed al-Sadr's militia withdraw from Najaf over a 72-hour period.

In return, American troops would stay away from Shiite holy sites in Najaf and Kufa — scene of sharp clashes between U.S. and militia forces since al-Sadr launched an anti-occupation uprising in early April.

Ahmad al-Shibani, an official from al-Sadr's office in Najaf, said al-Sadr's movement is likely to have objections. He said he didn't know whether the militia would agree to joint Iraqi-U.S. patrols or to give up their arms.

Two Polish contractors and five other employees of a construction company were abducted Tuesday near Baghdad but one of the Poles escaped, a Polish army spokesman said.

The group was abducted from their office and forced into a car, before one got away, Polish spokesman Lt. Col. Robert Strzelecki said. Authorities are searching for the missing people, including three Kurdish security guards and two other staffers whose nationality was not immediately known, he said.

Also Tuesday, thousands of Iraqis cheered and threw stones as U.S. Marines pulled out of Khaldiyah, a largely Sunni Muslim area and a center of the anti-American insurgency about 50 miles northwest of Baghdad.

The withdrawal took place under an agreement brokered with local clerics for Iraqi security forces to take over, said Lt. Col. Hammad Shahir Sarhan of the Iraqi forces.

U.S. officials have said they will gradually hand over security duties as the country takes sovereignty.

Later Tuesday, witnesses reported an oil fire at the main pump line leading north from Beiji, near the town of Sherqat, some 160 miles north of Baghdad. It was unclear what caused the fire. Iraq's pipelines are often targeted in attacks.