Iraq's interim prime minister said Thursday he expects insurgents to strike harder in the coming weeks and announced the creation of an intelligence service designed to combat terrorism.

Prime Minister Iyad Allawi's (search) comments to The Associated Press came amid a spate of new violence, including a car bomb Thursday that killed 10 people and wounded 40 others. Also, a decapitated body wearing an orange jumpsuit was found in the Tigris River (search), possibly that of a foreigner taken hostage.

Allawi said militants aiming to undermine Iraq's new government are determined not only to kill civilians and soldiers but also to destroy the nation's infrastructure in a campaign of sabotage.

"Whether it's electricity, oil, water, hospitals, roads, bridges, this is a clear sign that the terrorists are so evil that they are not only satisfied by hitting the targets, and killing and inflicting loss of life, but also (causing) destruction," he said.

Iraq's new government has talked increasingly tough about cracking down on insurgents. It passed emergency laws giving Allawi broad powers to combat violence; police have conducted sweeps of terror suspects in Baghdad (search) and other cities.

Those actions may have spurred militants to launch their series of attacks in recent days, Allawi said.

"They know that they should not give us a chance to rebuild our capabilities — security, police and the army. So they want to undermine our efforts," he told AP, sitting in front of the red, green and white Iraqi flag.

They will "hit harder in the weeks ahead, and maybe even months ahead."

Scores of people have been killed in suicide bombings, shootings and roadside assaults since the transfer of sovereignty from U.S. occupation officials to the interim government June 28. At least 71 Iraqis and 38 U.S. troops have been killed since the handover.

Militant groups also have taken several foreign contractors hostage, threatening to kill them if their governments did not withdraw troops or meet other demands. Several hostages have been beheaded, including U.S. businessman Nicholas Berg.

The headless body that Iraqi police found Thursday in northern Iraq had not been identified. U.S. and Bulgarian officials were investigating whether it belonged to a Bulgarian hostage that militants affiliated with Abu Musab al-Zarqawi said they killed Wednesday.

Allawi accused insurgents of trying to push the international community out of Iraq and appealed to foreign governments to stand fast. Iraq's fledgling security force is deeply dependent on 160,000 U.S.-led multinational troops for help maintaining order.

"We hope and wish that all civilized countries and the international community, our neighbors and brothers in the Islamic world, close ranks really to fight terrorism, because God forbid any place they gain or they win is a disaster for the world on a global level," Allawi said.

He added that sabotage against oil installations and pipelines has cost Iraq $1 billion over 10 days, funds needed for rebuilding from the devastation of war and years of sanctions.

As he lashed out at insurgents, Allawi also mentioned his efforts to win over ordinary Iraqis. He said he met with tribes and resistance fighters from the restive city of Fallujah on several occasions.

"We spoke very openly to them, and we told them that there is one thing that is going to prevail in Iraq and that is the rule of law. And we are not going to tolerate any problem that is going to touch the lives of the Iraqi people," Allawi said, speaking English in the interview with Associated Press Television News.

About 150 militants fled Fallujah in recent days after people there let them know they were no longer welcome, he said. "We hope other people will do the same."

At a press conference earlier Thursday, Allawi announced the creation of a new intelligence service — the General Security Directorate — dedicated to defeating the insurgency.

It "will annihilate those terrorist groups, God willing," he said. Allawi provided few details but said the new service would not rely on "elements" of Saddam Hussein's feared intelligence agency. He left open the door to call on former officials not responsible for grievous crimes under Saddam.

The creation of such an intelligence unit was a logical step for the new government to succeed, said Anthony Cordesman, an Iraq expert with the U.S.-based Center for Strategic and International Studies.

"If it cannot create such capabilities, it cannot act as a government," he said.

But Jeremy Binnie, Middle East editor for Jane's Sentinel Security Assessments magazine in London, dismissed Allawi's announcement as "rhetoric to boost his standing with Iraqis, and also the U.S. public, to demonstrate he is the right man for the job and he's the right man to stabilize Iraq."

Allawi said an expected amnesty for insurgents would be announced next week. He reiterated his government's plans to restore the death penalty — suspended during the U.S. occupation — to punish militants.

"We need some sanctions that are up to the scale of those crimes," Allawi said in his government's defense.

The prime minister also announced that he would make his first foreign tour as prime minister to nearby Arab countries, including Egypt and Saudi Arabia.

Allawi spoke amid an intense wave of violence, some of it targeting his 17-day-old government.

A car bombing near police and government buildings in the western city of Haditha killed 10 people and wounded 40 Thursday morning. The attack came a day after a bombing in Baghdad near the area housing government offices and the U.S. Embassy killed at least 10 people.

Also Thursday, Gunmen opened fire on a car belonging to Iraqi Foreign Minister Hoshyar Zebari, killing one official and wounding two others. Zebari was not in the vehicle. A day earlier, insurgents ambushed a convoy transporting provincial Gov. Osama Youssef Kashmoula, killing him and two guards.

Interior Minister Falah Hassan al-Naqib, with Allawi at the news conference, said the government had arrested terrorists and criminals in the cities of Mosul and Baghdad in recent days.

Iraq's sparsely patrolled borders, which foreign fighters are accused of exploiting to enter the country, have not yet been secured, but the government was working with the armed forces to change that, he said.

"We have organized crime and we have terrorism. We are working against the two," he said. "You will seem some great results soon."

Al-Naqib said at least 15 Al Qaeda linked operatives had been arrested and were being questioned by police.