Sectarian killings have surged in parts of Baghdad not yet included in a security offensive, the U.S. military said Thursday, while bombings and other insurgent attacks killed four American soldiers and wounded 25 in the capital region.

Police reported finding 20 bodies dumped on streets, many of them victims of reprisal killings in the escalating conflict between Shiite and Sunni Arabs. Six people died when a car bomb exploded at a soccer field in Fallujah, raising the death toll across Iraq to at least 28.

One of the few positive developments for the U.S.-led coalition and the national unity government was the reported killing of a senior member of Al Qaeda in Iraq and the capture of another.

Shiite politicians, meanwhile, said they had made progress in trying to break a deadlock over legislation to establish autonomous regions as part of a federated Iraq. Sunni Arabs oppose the bill, fearing it could split Iraq into three sectarian and ethnic cantons.

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The worst violence in Baghdad came at midday when a suicide car bomber attacked U.S. troops on the western outskirts of the city, killing two Americans and wounding 25, the U.S. command said. It said six of the wounded had returned to duty and 15 were not seriously injured.

Two more U.S. soldiers also were killed in the Baghdad area, one when his patrol was hit by small-arms fire and the other when a roadside bomb exploded. The command also announced the killing of a soldier Wednesday near the northern city of Mosul, raising to at least 2,676 the number of U.S. military personnel killed since the war began, according to an Associated Press count.

Violence has intensified over the past two days, with more than 140 people either killed by attacks or their bodies found dumped in the streets of Baghdad.

"There was a spike in violence in Baghdad over the past 24 hours from murder-executions," said Maj. Gen. William B. Caldwell, the U.S. command's spokesman. "Most of those are associated with sectarian violence, not all necessarily, but a large portion."

He said the violence had intensified in areas that have not been reached by Operation Together Forward, a security campaign launched Aug. 7 with 12,000 U.S. and Iraqi soldiers.

"The terrorists and death squads are clearly targeting civilians outside of the focus areas," Caldwell said.

In areas that have been part of the operation, U.S. and Iraqi forces have cleared more than 52,000 buildings, found 32 weapon caches, detained 91 people and seized more than 1,200 weapons, Caldwell said.

"Overall, as part of the Baghdad security plan, we have seen a sustained reduction of level in the violence of attacks and murders in the focus areas," he asserted.

In Washington, State Department spokesman Sean McCormack said that "there is a lot of progress being made" to stabilize the Baghdad area and toward the U.S. goal of turning over security in much of the country to Iraqi forces by the end of the year.

As for the continuing bloodshed, McCormack said, "Al Qaeda clearly has an interest in fomenting sectarian violence in Iraq."

Iraq's Interior Ministry reported that Abu Jaafar al-Liby, who it described as either the second or third most important figure in Al Qaeda in Iraq, was killed by police earlier this week.

Four other insurgents were killed and two were arrested in the raid, a ministry spokesman, Brig. Abdul-Karim Khalaf, told The Associated Press.

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Al-Liby was in charge of the Baghdad sector of Al Qaeda in Iraq, Khalaf said. He said two letters were found on his body — one addressed to Usama bin Laden and the other to Abu Ayyoub al-Masri, who is thought to be Al Qaeda in Iraq's leader. Both letters pledged loyalty and promised more attacks, Khalaf said.

Caldwell said U.S. military forces also had captured a senior Al Qaeda figure and personal associate of the group's new leader. He was arrested along with 70 others Tuesday in a series of 12 raids, the U.S. spokesman said.

The man, who was not identified, led assassination, kidnapping and bomb-making cells in Baghdad, and played a key role in Al Qaeda's activities in Fallujah before it was attacked by U.S. troops in November 2004, Caldwell said.

Another U.S. officer, Lt. Col. Barry Johnson, said the man was adept at making car bombs and roadside bombs and liked to set off explosives himself. "This terrorist's capture is a significant blow to Al Qaeda, and another step toward defeating terrorism in Iraq," Johnson said.

On the federalism issue, members of the major Shiite political coalition, the United Iraqi Alliance, said they had made some headway in persuading leaders of other parties to support the proposed legislation, which could be introduced next week.

Alliance leaders sent delegations to the Shiite holy city of Najaf to meet with radical Shiite cleric Muqtada al-Sadr and Grand Ayatollah Mohammed al-Yaqoubi, spiritual leader of the Fadhila party.

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