A homicide bombing killed the head of the U.S.-appointed Iraqi Governing Council (search) as his car waited at a checkpoint near coalition headquarters Monday, a major setback to American efforts to stabilize Iraq just six weeks before the handover of sovereignty.

A roadside bomb containing deadly sarin nerve agent also exploded "a couple of days ago" near a U.S. military convoy in Baghdad, Brig. Gen. Mark Kimmitt (search) said Monday, adding two explosives experts were treated for "minor exposure."

However, Defense Secretary Donald H. Rumsfeld said the results were from a field test, which can be imperfect, and said more analysis was needed. If confirmed, it would be the first finding of a banned weapon upon which the United States based its case for war.

Two American soldiers were killed in action Monday in Anbar province west of Baghdad, the military said. The troops were assigned to the 1st Marine Expeditionary Force, but the military declined to release other details, citing security concerns.

Izzadine Saleem (search), also known as Abdel-Zahraa Othman, was waiting in a Governing Council convoy at a U.S. checkpoint along a tree-lined street preparing to enter the Green Zone (search) when the bomb was detonated. It apparently had been rigged with artillery shells and hidden inside a red Volkswagen.

Iraqi officials said nine people, including the bomber, were killed and 14 Iraqis and an Egyptian were wounded in Monday's attack. Kimmitt put the death toll at seven. Two U.S. soldiers were slightly wounded.

Iraqi and coalition officials vowed that the power transfer would take place on June 30, as scheduled, despite the attack.

Secretary of State Colin Powell called Saleem an Iraqi patriot. "Terrorist may have taken his life, but they will never be able to kill his dreams or those of the Iraqi people."

White House spokesman Scott McClellan said Iraqis will "continue his work" of building a democratic nation.

Saleem, a Shiite Muslim in his 60s, held the rotating presidency of the 25-member Governing Council for May. He was the second council member slain since their appointment last July; Aquila al-Hashimi was mortally wounded by gunmen in September.

Insurgents also have targeted police and army recruitment centers and other Iraqis perceived as owing their positions to the Americans.

The U.S. military said the car bombing was a homicide attack and Kimmitt said it had the "classic hallmarks" of Abu Musab al-Zarqawi (search), a Jordanian-born militant with links to Al Qaeda.

However, a previously unknown group, the Arab Resistance Movement, claimed responsibility, saying in a Web site posting that two of its fighters carried out the attack on "the traitor and mercenary" Saleem.

Kimmitt said he did not know if the Arab Resistance Movement was "a cover for the Zarqawi network or if it's an actual organization."

Al-Zarqawi is believed responsible for many of the vehicle bombs in Iraq in recent months and for the beheading last week of U.S. civilian Nicholas Berg.

The Governing Council selected Ghazi Mashal Ajil al-Yawer, a Sunni Muslim civil engineer from Mosul, to succeed Saleem. Al-Yawer will lead the council until June 30, when sovereignty will be transferred to a new interim Iraqi government.

Appearing before reporters with several council colleagues, al-Yawer promised the Iraqi leadership would continue "the march toward building a democratic, federal, plural and unified Iraq."

"God willing, the criminal forces will be defeated despite all the pain they are causing to our people and their heroic leaders," he said.

The Arab Resistance Movement Web site appeared to be associated with Anbar province, a stronghold of the Sunni resistance that includes Fallujah.

Governing Council member Ahmad Chalabi said militants have using Fallujah as a base since U.S. Marines lifted a three-week siege there last month and turned security over to an Iraqi force that includes members of Saddam Hussein's former army.

"The terrorists are free to roam around and they have been given sanctuary in Fallujah," Chalabi complained. "The garage is open and car bombs are coming repeatedly."

U.S. officials, who have touted the Fallujah agreement as a success story, cast doubt on Chalabi's claim.

L. Paul Bremer, the top U.S. administrator in Iraq, called Saleem's killing a "shocking and tragic loss" and promised that "the terrorists who are seeking to destroy Iraq" would be defeated.

Saleem's killing stunned a country already reeling from an upsurge in violence. The United States, the United Nations and their Iraqi partners have not agreed on the structure of a new government that is to take office — nor what powers it will wield.

U.N. envoy Lakhdar Brahimi has been consulting with council members and other Iraqis about the makeup of the interim government, and there had been speculation Saleem might get a post.

In a statement, Brahimi condemned the killing "which has taken the life of one of Iraq's most loyal and patriotic citizens ... who worked sincerely and selflessly so that Iraq may regain its sovereignty and strength."

An uprising led by radical cleric Muqtada al-Sadr has spread violence throughout the formerly quiet Shiite areas south of Baghdad, while U.S. forces continue to battle Sunni insurgents to the north and west of the capital.

Polish forces estimated 30 al-Sadr militiamen were killed in overnight fighting in the Shiite holy city of Karbala, including 17 near the Imam Hussein Shrine, Kimmitt said Monday.

Italian troops on Monday moved back to a military base they abandoned in Nasiriyah during fighting with the militiamen, who later left the base themselves, Italian officials said.

Italian military Chief of Staff Adm. Giampaolo Di Paola said he believed the insurgents departed after negotiations with Shiite leaders.

A corporal was killed during the fighting — the 20th Italian to die in Iraq. A U.S. airstrike against five vehicles in Nasiriyah killed an estimated 20 militiamen, Kimmitt said.

According to Kimmitt, the sarin explosion was confirmed by the Iraqi Survey Group, a U.S. organization that has searched for weapons of mass destruction since Saddam's ouster last year.

The sarin was in an artillery shell that had been rigged as a bomb, Kimmit said. It was discovered by a U.S. convoy and exploded before it could be defused; the explosion released a small amount of sarin, Kimmitt said.

He said he believed that insurgents who rigged the artillery shell as a bomb didn't know it contained the nerve agent. "The former regime had declared all such rounds destroyed before the 1991 Gulf War," Kimmitt said.

Two former U.N. weapons inspectors, Hans Blix and David Kay, said the shell was likely scavenged from a dump and did not signify Iraq had stockpiles of such weapons.