Updated

U.S. Marines (search) clashed with insurgents on the outskirts of the rebel stronghold of Fallujah (search) and launched airstrikes at militant targets, the U.S. command said Friday, ignoring a call from the city's leaders to halt new attacks.

Around sundown Thursday, militants fired small arms, rocket-propelled grenades and mortars at U.S. forces, who hit back with ground fire and airstrikes. Hospital officials in Fallujah reported that eight people were killed and two wounded in the fighting.

The U.S. command said it had no information on "anti-Iraq forces" killed.

Insurgent attacks across the country have increased by about 25 percent since the beginning of Ramadan (search), the Islamic holy month that began last weekend, with mostly car bombs and strikes on civilians rather than direct assaults on U.S. forces, Pentagon officials say.

The latest U.S. attacks came after Fallujah leaders had demanded Thursday that Iraqi Prime Minister Ayad Allawi's (search) government force a halt to the frequent U.S. airstrikes in the city. A day before that, a senior Sunni cleric, Sheik Harith al-Dari, urged Iraqis to boycott elections scheduled for January elections if the Americans launch an all-out attack on the city.

"We demand the suspension of airstrikes and call on the government to call on families to return to their homes as a gesture of goodwill and a prelude to the solution of all outstanding problems," the Fallujah leaders said in a statement after an emergency meeting at city hall.

Late Thursday, Al-Arabiya (search) television reported that the Iraqi government had rejected the latest demands.

On Friday, the military said that "combat operations" have not begun and American forces have not entered the city. Coalition forces are still conducting "security operations," the military said.

An airstrike Thursday at 10 p.m. hit one suspected militant site where "20 armed individuals were seen moving crates and equipment from house to house," the U.S. military said. Multiple secondary explosions were seen but the military said it had no information on casualties.

American commanders have spoken of a new offensive ahead of the January elections aimed at suppressing insurgents who control a number of central Sunni Muslim cities, particularly Fallujah, where peace negotiations broke down several days ago.

Despite the threat of an election boycott, the top U.N. electoral expert in Iraq said that preparations for the vote are "on track" and the absence of international observers due to the country's tenuous security should not detract from the credibility of the process.

"International observation is important only in that it's symbolic," Carlos Valenzuela told The Associated Press on Thursday. "I don't think that the process will be less credible without observers, absolutely not. They are not the essence. They are not essential. They are not important. If they can come, fine, of course."

The election is seen as a major step in Iraq's path to democratic rule. The United States, which formally ended its occupation of Iraq in June but still wields vast influence, sees the vote as a key step toward establishing a stable government.

Iraqis will select a 275-seat assembly whose main task will be to draft a constitution. If adopted, the document will be the foundation for a second vote to be held by Dec. 15.

On Thursday, the British government agreed to a U.S. request to transfer 850 British troops of the First Battalion, Black Watch Regiment from southern Iraq to an area near Baghdad so U.S. troops could be shifted to insurgent hotspots.

The decision has been highly controversial with major opposition within the governing Labour Party among lawmakers who saw it as a political move to aid President George W. Bush ahead of November elections in America.

Fallujah leaders on Thursday had called on the Iraqi government to pursue a peaceful solution to the military standoff around the city and order a halt to frequent U.S. airstrikes.

They had also issued a list of other demands, including compensation for damaged property and withdrawing U.S. troops from the city's outskirts. Fallujah leaders want any Iraqi military units which deploy into the city to consist exclusively of Fallujah natives.