U.S. troops have "isolated Fallujah (search)" and all traffic in and out of the city has been halted after the Iraqi government ordered emergency rule in most of the country, the U.S. military said.

A U.S. statement said that in accordance with the emergency decree, which the Iraqi government announced earlier Sunday, the Army's 1st Cavalry Division 2nd Brigade Combat Team "isolated Fallujah and all traffic is being halted."

The statement added that U.S. forces were "finishing final preparations for an assault on Fallujah."

U.S. officials also said insurgents had stepped up their use of mortar and other "indirect fire" against American positions around the city in the last 24 hours and had launched more coordinated attacks against U.S. checkpoints.