Explosions and gunfire shook the center of Najaf (search) on Sunday as U.S. troops in armored vehicles and tanks rolled back into the holy city and new fighting broke out after truce talks collapsed.

The new U.S. offensive in Najaf cast a pall over Sunday's opening of the National Conference (search), a gathering of more than 1,000 delegates from across Iraq seen as a key step toward democracy in the country.

Hours after the conference opened, insurgents fired a barrage of mortars that hit a commuter bus station in central Baghdad, killing two people and wounding 17 others, according to the Health Ministry.

The barrage apparently targeted the capital's Green Zone, the heavily protected neighborhood where the conference is taking place but instead hit the station, which was left littered with glass, shrapnel and blood.

Also in Baghdad, a roadside bomb killed a U.S. soldier hours before the conference began. At least 931 U.S. servicemembers have died in Iraq since March 2003.

The National Conference aims to give a broader spectrum of Iraqis a voice in the political process and increase the legitimacy of the interim government of Prime Minister Ayad Allawi (search), which is dependent on American troops and money even after the end of the U.S. occupation.

But the failure to put an end to uprising in the south by followers of radical Shiite cleric Muqtada al-Sadr (search) — along with the continued Sunni-led insurgency elsewhere — threatens to undermine the conference.

Dozens of explosions from tank shells and mortars as well as constant small arms fire shook Najaf's vast cemetery, where fighters from al-Sadr's Mahdi Army militias have been battling U.S. troops amid the tombs since the violence first broke out here Aug. 5.

U.S. troops who had been amassing at a nearby base rolled into the area around Najaf's Old City, the Mahdi Army's stronghold, in the morning hours. The new fighting ended the quiet that the city had seen since Friday as truce talks were underway.

An explosion, believed to be from a tank round, landed near the outer wall of the compound housing the revered Imam Ali Shrine (search), the militants' informal headquarters and Iraq's holiest Shiite site, said al-Sadr aide Ahmed al-Shaibany. "The shrine was not hit," he said.

Three days of negotiations to end the standoff fell apart Saturday, when government negotiators called the talks fruitless. Al-Sadr representatives said the sides had agreed on a cease-fire deal before Allawi personally intervened to quash it.

In Baghdad, about 1,300 religious, political and civic leaders gathered for the unprecedented three-day meeting to discuss political issues and help choose a 100-member national council meant to serve as a watchdog over the country's interim government before elections scheduled for January.

"This conference is not the end of the road for us, it is the first step ... to open up horizons of dialogue," Allawi told the delegates. "Your blessed gathering here is a challenge to the forces of evil and tyranny that want to destroy this country."

Some 70 factions are participating in the conference, though several are boycotting it — including al-Sadr's movement. The goal of the gathering is to make Iraqis of all political and religious groups feel they have a voice in the government as the country struggles to enact democratic reforms.

"The challenge before you is great," U.N. envoy Ashraf Jehangir Qazi told the delegates. "But these are things you can and will achieve."

But the Najaf violence, which has angered many in Iraq's Shiite majority against the government, cast a shadow from the start.

After the opening speeches, Nadim al Jadari, an official with the Shiite Political Council, ran onto the platform and threatened to quit the conference — which would be a painful blow to the government — unless negotiations were restarted to end the fighting in Najaf.

In an attempt to assuage the complaints, a working committe was formed to find a peaceful solution to the tension in Najaf.

At least 30 people were part of the committee, said delegate Saad Qindeel, from the Supreme Council for the Islamic Revolution of Iraq, the country's largest religious group.

"All kinds, all colors, Shiite and Sunni, they're all involved in this," he said.

On Saturday, about 10,000 demonstrators from as far away as Baghdad arrived in Najaf to show their solidarity with the militants and act as human shields to protect the city and the holy Imam Ali shrine, where the militants have taken refuge since the fighting started.

Before the renewed violence Sunday, Mahdi Army militiamen were seen patrolling the streets of Najaf's Old City. Police officials warned journalists to leave the city, saying they had intelligence a car bomb might be sent to target them.

During the negotiations, al-Sadr demanded a U.S. withdrawal from Najaf, the freeing of all Mahdi Army fighters in detention and amnesty for all the fighters in exchange for disarming his followers and pulling them out of the shrine and Najaf's old city, aides said.

But on Saturday, Iraq's National Security Adviser Mouwaffaq al-Rubaie announced the talks were over, saying, "After three days, my government thought there was no use in continuing."

However, Qais al-Khazali, al-Sadr's spokesman in Najaf, said a deal had been reached and al-Sadr — who was not in the talks himself — had signed it, when "we were surprised that they (the government negotiators) got instructions from Dr. Allawi to leave."

The U.S. military estimates hundreds of insurgents have been killed since the clashes broke, but the militants dispute the figure. Six Americans have been killed, along with about 20 Iraqi officers, it said.

In other violence Sunday, a Ukrainian patrol commander, Capt. Yuriy Ivanov, was killed in a land mine explosion near Suwayrah, 25 miles south of Baghdad, said Lt. Col. Artur Domanski, a Polish military spokesman.

Also, a Dutch military policeman was killed and five others seriously wounded during violence Saturday in the southern city of Rumaythah, the Dutch Defense Ministry said Sunday.

In a separate incident in Rumaythah, al-Sadr militants fought with police in a battle that killed two people, including one policeman, said Dr. Mohammed al-Kharasani, a hospital official.

On Sunday afternoon, U.S. jet fighters bombed the volatile city of Fallujah, witnesses said. There were no immediate reports of injuries.