U.S. aircraft dropped leaflets Wednesday in a thinly populated farming area south of Baghdad, offering a $200,000 reward for any information on three missing American soldiers believed captured by Al Qaeda terrorists.

The new search tactic came as a senior U.S. military official in Baghdad told FOX News there was reason to believe the missing GIs were still alive. The official, who spoke on the condition of anonymity, would only say the assessment was based on intelligence.

U.S. officials said the leaflet drop in the so-called Triangle of Death was part of an intensified search involving thousands of troops. Searchers are trying to isolate areas where the captives may have been taken to prevent their captors from moving them.

"The captors don't have freedom of movement," said U.S. Army Maj. Kenny Mintz. "If they have the soldiers, they can't move them from where they are. We're doing a deliberate search of the areas."

The Islamic State of Iraq, the Al Qaeda-linked terror group that claimed to have abducted the 10th Mountain Division soldiers after an attack Saturday that left four other U.S. soldiers dead, warned the Americans in a Web statement to call off the hunt "if you want their safety."

In a press briefing in Baghdad, U.S. military spokesman Maj. Gen. William Caldwell said over 140 tips received from Iraqis had led to 37 operations in the search for the missing soldiers.

American soldiers have questioned more than 600 people and detained at least 11 since Saturday, Caldwell added.

Meanwhile, ten mortar rounds slammed into the U.S.-controlled Green Zone on Wednesday, killing at least two Iraqis and wounding 10 other people, officials said.

The explosions occurred shortly before 4 p.m. local time, about the same time the Green Zone was hit on Tuesday.

U.S. Embassy spokesman Lou Fintor said 10 mortars struck the sprawling complex on the west bank of the Tigris River.

He said the two killed were Iraqis as were eight of those wounded. He said two foreigners were wounded but they were not Americans.

An Iraqi security official, who spoke on condition of anonymity because he wasn't authorized to release the information, said two of the mortar rounds landed on a parking lot used by drivers for Prime Minister Nouri al-Maliki. The official said one driver was killed and two others were wounded.

In other violence reported Wednesday, a parked car bomb that detonated near a market in a Shiite enclave northeast of Baghdad killed at least 32 people, and deadly clashes broke out in a southern Iraqi city between militia and police.

The car bomb attack occurred about 7:45 p.m. Tuesday in the village of Abu Saydah in the volatile Diyala province, local police said.

Residents of the farming village of some 10,000 said the attack appeared to be revenge for a confrontation a month ago in which locals killed 12 Al Qaeda fighters. They said residents had fought back against Sunni militants trying to storm the village and 10 days later received threats to leave the village or face death.

Jassim Mohammed, a 35-year-old car dealer whose house was near the blast site, said the car bomb was parked between two teashops and a small market.

"I rushed to the scene and helped carry the wounded to civilian cars," he said, describing bloodstained pavement and body parts strewn across the site of the explosion.

Hospital officials and victims said it appeared chlorine gas was used in the attack as many of the wounded were having difficulty breathing and their sight was affected. But provincial police officials denied the toxic gas was involved.

One man had a white cloth across his eyes as he lay in his hospital bed; others were bandaged from head to toe.

Chlorine gas attacks the eyes and lungs within seconds, causing difficulty in breathing and skin irritation in low-level exposure. Inhaled at extremely high levels, it dissolves in the lungs to form hydrochloric acid that burns lung tissue, essentially drowning a person as liquid floods the lungs.

The chemical has been used a number of times recently in insurgent attacks in Iraq.

Last month, a suspected Al Qaeda in Iraq suicide bomber smashed a truck loaded with TNT and toxic chlorine gas into a police checkpoint in Ramadi, killing at least 27 people. It was the ninth such attack since the group's first known use of a chemical weapon in January.

Abu Saydah is a mainly Shiite village about 25 miles northeast of the Sunni insurgent stronghold of Baqouba, the capital of the province that has seen a recent spike in violence largely blamed on militants who fled Baghdad ahead of a U.S.-Iraqi security crackdown.

Kadim Hussein, a 45-year-old farmer who was taken to the Imam Ali hospital in Sadr City, a Shiite area in Baghdad, claimed the hospitals in Baqouba would only accept Sunnis.

"My eyes became puffy due the chlorine gas that was packed in the car bomb," he said, adding he also had difficulty breathing. "Also I had many pieces of shrapnel in my chest and right shoulder."

A hospital official said the facility had received three bodies and 11 wounded, who all showed symptoms of chlorine poisoning. The official spoke on condition of anonymity because he wasn't authorized to speak to the media.

Diyala province — with its mixed Shiite and Sunni Muslim population — has been the scene of frequent sectarian violence as well as attacks by anti-US insurgents.

The clashes between police and the Mahdi Army in Nasiriyah, 200 miles southeast of Baghdad, began about 2 a.m. in the city center. Both sides were still on the streets by sunrise, and shops remained closed, police said.

The fighting killed six civilians, two militants and one policeman, and 75 Iraqis wounded in the fighting, police said.

Police said the fighting began after the two militia members were arrested for allegedly firing mortar rounds in the area, and their comrades threatened to attack police if the suspects weren't released.

Fighting often erupts between supporters of radical Shiite cleric Muqtada al-Sadr's Mahdi Army and members of the rival Shiite Fadhila in mostly Shiite southern Iraq.

The Associated Press contributed to this report.