Sheraton Hotel in Baghdad Hit by Rockets

A trio of rockets slammed into the Sheraton Hotel in downtown Baghdad Tuesday, sparking a fire outside the building and a heavy gun battle in the street.

Mortars sailed toward the Sheraton and Palestine hotels, which both house journalists and foreigners, including many Americans. Only the Sheraton was hit in the attack by rockets that smashed into the side of the building, igniting a blaze and filling the lobby with smoke.

"It was a shattering explosion — a crack and then a massive, massive thud," said FOX News' John Cookson from the hotel, where he and the rest of the FOX News crew are staying. "The whole room shook, the tables shook, dust blew into the corridor outside." Other than a minor head wound on one crew member, the FOX News staff was safe, he said.

Earlier Thursday, U.S. officials said that two American soldiers were killed and two others were wounded in separate attacks involving roadside bombs. Twenty Iraqis were arrested in the north in operations against those suspected of planting explosives.

The Katyusha rockets that struck the Sheraton were fired from the back of a vehicle, Interior Ministry spokesman Col. Adnan Abdul-Rahman said. There were no casualties, he said.

The blasts set a palm tree on fire as tracer bullets streaked across the darkened sky. Several shaken Westerners emerged from the hotel, some covering their mouths with cloths, as workers swept up broken glass. A huge crack appeared in the lobby wall.

A security guard speaking on condition of anonymity said private security guards deployed on the roofs in the compound fired at the pickup truck, destroying it.

There were no reports of major injuries in the attack, and the damage was fairly minor.

Powerful explosions shook the area just before the Sheraton was struck, and automatic gunfire erupted in the street between the two hotels afterwards.

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Cookson said that in the minutes after the early evening rocket attack, there was "still a lot of confusion" as parts of the hotel were filled with "thick, acrid, choking smoke."

"This kind of thing gets people into a daze, and you have to come to your senses slowly," he said. Some guests could be seen calmly evacuating the 20-floor building after the dust had settled.

The FOX News crew was very close to where the mortars hit "with devastating force," Cookson said.

"We had a very, very narrow escape," he said. "We were all shaking, imagining as to what could have happened."

The Sheraton has been hit eight times, according to Cookson.

"It is a horrible, horrible climate to live in, a climate of fear, not knowing when death is going to come, not knowing when the next mortar is going to come," Cookson said.

The U.S. Army rolled in reinforcements, including Bradley fighting vehicles, armored personnel carriers and Humvees, to take up positions at the hotels.

The hotels are across the Tigris River from the U.S. Embassy compound in the heavily guarded Green Zone, where U.S. authorities earlier raised a security alert after an improvised bomb was found in front of a restaurant there.

The warning to Americans and Iraqi officials in the Green Zone followed the discovery Tuesday of an explosive device at the Green Zone Cafe, a popular hangout for Westerners living and working in the compound — which houses major U.S. and Iraqi government offices.

A U.S. military ordinance detachment safely disarmed it, U.S. officials said.

A loud explosion shook the Green Zone on Thursday afternoon and smoke rose from inside the compound. The U.S. military had no immediate information on the incident. Insurgents regularly fire at the compound.

Americans living and working in the zone were told to travel in groups and avoid specific areas and nonessential travel.

Although movements in and out of the Green Zone are restricted, about 10,000 Iraqis live inside the 4-square-mile district, located along the western side of the Tigris River.

Elsewhere in Iraq, one U.S. soldier from the 13th Corps Support Command died when a bomb exploded near his convoy late Wednesday outside the insurgent stronghold of Fallujah (search), the command said. Two other soldiers were wounded.

A 1st Infantry Division soldier was killed and an Iraqi interpreter wounded when insurgents attacked a patrol with a roadside bomb near Beiji, 155 miles north of Baghdad, the command said.

Four U.S. Marines and three Iraqi soldiers were injured this week in an operation to crush insurgents south of Baghdad.

About 240 detainees, meanwhile, were released from U.S. and Iraqi custody Thursday — including a prominent supporter of radical cleric Muqtada al-Sadr (search), the U.S. military said. It was the fourth round of releases under a joint U.S.-Iraqi review process set up Aug. 21 following the prisoner abuse scandal at Abu Ghraib prison in a continuing effort to reduce the inmate population and free those deemed not to be a security threat.

The publication in April of photographs showing naked, terrified Iraqi prisoners being abused and humiliated by grinning American guards at Abu Ghraib caused outrage here and internationally.

None of those freed Thursday were "high-value" detainees, who are processed separately from the 1,700 "security detainees" held at the Abu Ghraib facility near Baghdad and Camp Bucca in southern Iraq, said Lt. Col. Barry Johnson, a military spokesman.

About 830 detainees have been released in all since the Combined Review and Release Board began reviewing files in August. The military aims to transfer the bulk of the remaining Abu Ghraib security detainees to Camp Bucca, which currently is being expanded and upgraded to become the primary holding facility at the start of next year, Johnson said.

In Mosul, the U.S. military said American and Iraqi forces detained 20 people in northern Iraq and foiled a roadside bombing Wednesday in the city of Tal Afar, scene of intense fighting last month.

A U.S. demolition team defused a homemade bomb found beneath a police car, the U.S. command said. Eight people were arrested in raids in Tal Afar, and Iraqi National Guard troops seized two grain sacks full of dynamite, two-way radios used to detonate roadside bombs, and other materials, U.S. authorities said.

Twelve others were arrested in a series of raids in Mosul, the U.S. command said.

Homemade bombs have become an increasing threat because insurgents find them safer than other forms of attack that can draw devastating American return fire. In September, 29 Iraqi and multinational troops were killed by car bombs, according to the U.S. command.

On Wednesday, a car bomber slammed into an Iraqi military checkpoint northwest of Baghdad, killing 16 Iraqis and wounding about 30, Iraqi officials said. The attack occurred near an Iraqi National Guard camp near Anah, 160 miles northwest of Baghdad on the main highway to Syria. According to the U.S. military, the camp came under fire, and a few minutes later a vehicle sped to a nearby National Guard checkpoint and exploded.

U.S. and Iraqi forces are trying to restore enough control so national elections can be held in January. President Bush and Prime Minister Ayad Allawi insist the vote will take place, despite warnings by some U.S. military officials that it may not be possible in some areas.

More than 3,000 U.S. and Iraqi forces are trying to clear an insurgent stronghold in towns and villages just south of Baghdad notorious for kidnappings and ambushes. The U.S. command said 17 suspected insurgents were captured Wednesday in two joint raids by U.S. and Iraqi troops around Haswah and Iskandariyah, both about 30 miles south of Baghdad.

Since the operation began Tuesday, four U.S. Marines, three National Guard members and three civilians have been wounded, U.S. officials said. Raids have yielded 18 500-pound bombs, 197 rocket-propelled grenades, dozens of mortar shells and other military supplies, the command said.

The Iraqi government was reported close to an agreement with followers of al-Sadr to end weeks of fighting in his stronghold of Sadr City, a teeming Shiite slum in northeastern Baghdad.

An aide to al-Sadr offered Thursday to hand over medium and heavy weapons and cooperate with Iraqi security forces in the capital if the government stops pursuing members of the Shiite militia and releases most of the cleric's followers from jail.

The offer, made by al-Sadr spokesman Ali Smeisem on Al-Arabiya television, was aimed at striking a deal to end weeks of fighting between U.S. troops and al-Sadr's militia in Sadr City.

There was no comment from the Iraqi government or the U.S. command.

Smeisem made no commitment to disband the Mahdi Army militia — a key U.S. and Iraqi demand.

Smeisem also insisted the government respect the "political role" of al-Sadr's movement.

Allawi said Wednesday a committee was being formed to discuss what he termed an "initiative" to end the conflict. Kareem al-Bakhatti, a pro-al-Sadr tribal elder, said the framework agreement calls for al-Sadr's militiamen to turn in weapons in exchange for cash and immunity from prosecution for most of them.

Some al-Sadr aides expressed reservations, and the fiery cleric, whose Mahdi Army launched bloody uprisings in April and August, has frequently zigzagged in negotiations. A senior al-Sadr follower, speaking on condition of anonymity, said his side rejected the proposal because it did not include a halt to arrests, the release of prisoners or an end to house raids.

On Thursday, al-Sadr aides said authorities released pro-al-Sadr Shiite cleric Moayed al-Khazraji, whose arrest a year ago triggered days of protests and clashes with U.S. troops.

FOX News' Catherine Donaldson-Evans and The Associated Press contributed to this report.