U.S. Marines pummeled guerrillas taking cover Saturday at a taxi stand in a stronghold of support for Saddam Hussein's (search) ousted regime, killing three and wounding five others, military and hospital officials said.

The Marines came under fire in Ramadi, part of the so-called Sunni Triangle (search) and the site of frequent clashes with coalition forces, the military said. The Americans counterattacked, blasting the stand into a twisted pile of molten metal. Blood soaked the street.

At Ramadi's hospital, a child caught in the crossfire moaned in agony, video from Associated Press Television News showed.

"We went to the market near the stand, and the Americans struck against us," said the child, who did not give his name.

North of the capital, insurgents blew up three liquor stores in Baqouba (search) prompting concern Islamic militants may be trying to impose their strict interpretation of Islam there, witnesses said. The blasts killed a passing taxi driver, said Dr. Nassir Jawad from Baqouba General Hospital.

Iraq has been torn by a persistent insurgency since the fall of Saddam more than 14 months ago.

Meanwhile, the fate of captured Filipino worker Angelo dela Cruz (search) remained unclear. His captors had demanded the Philippines withdraw its 51-member force from Iraq or dela Cruz would be killed. They gave a Saturday deadline. Another 4,100 Filipinos work as key contractors on U.S. bases.

A spokesman for Philippine President Gloria Macapagal (search) said Saturday the country's small peacekeeping contingent would be withdrawn when its stint ends Aug. 20, though no decision had been made on whether to send replacements.

Later, officials in the Philippines said dela Cruz was about to be freed.

"While this man is still not in our hands, he will be brought to a hotel in Baghdad, where he will be turned over to our people," Labor Secretary Patricia Santo Tomas said.

But a diplomat familiar with the talks in Baghdad remained cautious, and the Al-Jazeera television station, which broadcast the original tape showing dela Cruz surrounded by armed men, said it received a statement Saturday night from the group denying he had been freed and calling him a "prisoner of war."

In the statement, the group called itself "The Islamic Army of Iraq — Khalid bin al-Waleed Brigade" and gave the Philippines an extension until Sunday night, according to Al-Jazeera.

In a video aired earlier Saturday on Al-Jazeera, the hostage urged his countrymen not to come to the country.

"I advise you not to come to Iraq because there are a lot of problems, and the Iraqi police won't be able to protect you, like what happened to me," he said, according to the announcer.

Also Saturday, saboteurs attacked a natural gas pipeline that runs from the oil-rich northern city of Kirkuk to a power station, an official with the North Oil Company said.

The attack could cut power supplies even as Iraq sizzles in summer temperatures topping 110 degrees Fahrenheit, but it wasn't clear how severe cutbacks would be.

Insurgents have targeted the country's crude oil, natural gas and electricity supplies to cut off sources of revenue to Iraq's interim government. Such attacks, together with hostage taking and other acts of intimidation, are intended to disrupt efforts to stabilize and rebuild the country.

While the Philippines awaited dela Cruz's fate, Bulgaria expressed hope that two Bulgarian truck drivers also kidnapped by militants here were still alive.

Jordanian militant Abu Musab al-Zarqawi's Tawhid and Jihad group threatened to kill the men if the United States did not release all Iraqi detainees — an ultimatum that has expired.

Bulgarian Foreign Minister Solomon Pasi suggested Saturday that the men were still alive, though he warned the information was "unconfirmed."

President Bush telephoned Bulgarian President Georgi Parvanov on Saturday to discuss the hostage situation.

Bush offered to assist but refused to negotiate with terrorists, the White House said. Parvanov affirmed Bulgaria's strong commitment to Iraq.

A Pakistani truck driver who returned home after being held hostage here said Saturday he watched as three fellow captives were beheaded. Amjad Hafeez, 26, said he was taken to a room where two foreigners and an Iraqi were killed with a sword.

Hafeez told The Associated Press the two foreigners were "English-speaking people" who were crying, weeping and begging for their lives. He said they were killed June 27, but there was no confirmation on their identities.

Both an American hostage and a South Korean known to have been killed by the group were reportedly slain before that date.

Earlier Saturday, a senior military official in Bulgaria, Gen. Stefan Stefanov, deputy chief of the military intelligence service, dismissed speculation that the two Bulgarians were the victims Hafeez saw die.