U.S. soldiers are trying to intercept guerrilla forces moving toward Baghdad who are trying to disrupt the handover of sovereignty to a new Iraqi government next week.

Meanwhile, explosions and gunfire rocked the turbulent city of Fallujah (searchfor a second day Friday.

U.S. tanks and armored vehicles maneuvered on the highway near the edges of Fallujah, firing in several directions, while armed men in an eastern suburb returned fire, witnesses said. Seven people have died in two days of exchanges there, hospital officials said.

Hours later, a roadside bomb exploded in a residential neighborhood in Baghdad (search), killing one Iraqi policeman and wounding another, police said.

Iraq's interim vice president warned that a drastic deterioration in the country's security could lead to emergency laws or martial law, however undesirable such measures may be in a democratic society.

"Announcing emergency laws or martial law depends on the nature of the situation. In normal situations, there is clearly no need for that (step)," Ibrahim al-Jaafari, a Shiite and member of the Islamic Dawa Party (search), said in an interview.

"But in cases of excess challenges, emergency laws have their place," he said, adding that any such laws would fall within a "democratic framework that respects the rights of Iraqis."

After a series of attacks north and west of the capital this week, soldiers set up checkpoints Thursday around the city of 8 million people to intercept weapons, guerrillas and bombs.

It's feared that Jordanian-born terrorist Abu Musab al-Zarqawi (search) — the Al Qaeda-linked militant who claimed responsibility for the earlier attacks in Fallujah, Mosul and elsewhere, as well as for the beheading of several non-Iraqi contract workers — is planning a string of car bombings in Baghdad.

"There is clearly a transnational threat, as represented by al-Zarqawi, and that threats appears - based on what we've seen in Fallujah and Mosul today - to want to bring the attack to Baghdad," Col. Michael Formica, commander of the 1st Cavalry Division's 2nd Brigade, said Thursday.

100 Dead in One Day

Insurgents launched coordinated attacks against police and government buildings across Sunni Muslim areas of Iraq on Thursday, killing more than 100 people, including three American soldiers, and wounding more than 320, Iraqi and U.S. officials said.

Most of the deaths were in Mosul, where 44 people were killed and more than 220 injured in attacks that included a string of car bombs. Clashes also occurred in Baqouba, Ramadi, Baghdad and other areas.

In Baghdad, insurgents attacked four Iraqi police stations using mortars, hand grenades and assault rifles on Wednesday and Thursday. Police fought back, and defended the stations with minimal assistance from coalition forces, a U.S. statement said.

"The new government is displaying a great deal of courage. The prime minister is not blinking in the slightest," Secretary of State Colin Powell (search) told reporters Thursday after his meeting with the Haitian interim president. Those responsible for the latest violence "are murderers, these are terrorists."

"They're attacking innocent Iraqis who just want to go about their lives, who want to wait and see what this new government will do for them," Powell continued. "They have to be defeated, they will be defeated, and they cannot be allowed to deny the people of Iraq the better future that is awaiting them."

Formica, who commands the troops in west Baghdad, patrolled his area Thursday, checking on Iraqi National Guard units and their American instructors as they set up the checkpoints and searched cars and trucks.

"Using Iraqi forces predominantly, we have set up checkpoints on the major roads leading into Baghdad," Formica said. "In addition, we execute what we call snap checkpoints along secondary roads at random times."

At neighborhood council meetings earlier this week, Iraqi civilian leaders asked U.S. commanders to set up roadblocks to help prevent attacks. Formica said his troops were also gathering information on insurgent hideouts and conducting raids to capture the guerrillas before they can carry out attacks.

"We conduct offensive operations ... to defeat them before they are ever able to conduct their terrorist attacks," Formica said. "But perhaps most important ... is to gain the support of the Iraqi people."

U.S. forces had anticipated that insurgents loyal to al-Zarqawi and other Iraqi groups opposed to Iraq's new interim government would step up attacks ahead of the June 30 handover. Iraqi civilians at neighborhood meetings said they had heard rumors of widespread attacks planned for after June 26 and of criminal groups planning to use the fighting to launch a looting spree.

U.S. officers believe the insurgents' goal is to discredit the U.S.-led coalition that has occupied Iraq, as well as the new government expected to take over July 1.

Iraqi Security Forces 'Did a Very Good Job'

In Thursday's attacks, Iraqi police - entrusted to take a larger role in security after the hand over of power - appeared outgunned and unable to hold positions outside of Baghdad. American troops raced to offer support, using aircraft, tanks and helicopters to repel the guerillas.

But U.S. commanders said local Iraqi security forces are getting better at handling such attacks

"We've been working hard for the past year and for us in northern Iraq … to help the Iraqis develop the capacity to handle these kinds of situations ourselves and yesterday they did a very good job," Brig. Gen. Carter Ham of the multinational brigade in the north, told Fox News on Friday.

Al-Zarqawi's group, the Tawhid and Jihad movement, claimed responsibility for the attacks in a statement on an Islamic Web site. The statement said that members of the "martyrs' battalion" had carried out a number of "blessed operations."

Ham said that while there's no definitive proof that Zarqawi is in fact behind the latest attacks, "I gotta tell you that would not surprise me at all if we find out Zarqawi and his operatives are behind this," Ham said.

In the north, however, coalition troops in Mosul and the surrounding areas have seen former Saddam Hussein regime elements "who have been in attacks against us and against Iraqis," Ham continued.

The car bombs detonated this week, however, are "generally the mark of terrorist organizations," Ham said.

"I think it becomes clearer and clearer every day that the enemy that all of us face here in Iraq is not only focused against Iraqi or coalition forces but also against Iraqis who want freedom peace and democracy," he continued. "I think that message has hit home" with local Iraqis and government officials, who now "recognize that this war is against them and they have to take an active part in defeating it."

Formica said his troops would not allow the insurgents to get a foothold in Baghdad.

"The soldiers of this brigade are committed to the defense and the forward progress and sovereignty of this nation and we will fight alongside - and if need be bleed and die - with the people of Iraq to ensure that happens," he said.

Fox News' Liza Porteus, Teri Schultz and The Associated Press contributed to this report.