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Extremists unleashed a thunderous barrage of mortars or rockets Tuesday against the Green Zone, killing at least three people and wounding 18, the U.S. Embassy said. One of the dead was an American service member.

The barrage of an estimated 20 projectiles crashed into the Green Zone about 4:15 p.m.

A U.S. Embassy statement said the dead included one U.S. military member, an Iraqi and a person of unknown nationality.

The 18 wounded included five Americans -- two military and three contract employees, the statement said.

Prime Minister Nouri al-Maliki warned gunmen a week ago to stop firing rockets and mortar rounds into the Green Zone.

Many of the mortar attacks come from the Mahdi Army, a militia loyal to anti-American cleric Muqtada al-Sadr, who was once al-Maliki's ally, though Sunni insurgents have also carried out mortar attacks.

Meanwhile, Sunni extremists attacked an isolated village northwest of Baghdad in a fierce battle with residents that reportedly left dozens dead, the deputy governor of Iraq's Diyala province said.

Residents of the village of Sherween called Deputy Gov. Auf Rahim appealing for help, saying there were no Iraqi police or army units nearby to protect them, according to an Associated Press reporter who was in Rahim's office in the city of Baqouba when he received the call.

Rahim said he was told in the call that the attackers were believed to belong to Al Qaeda and that the fighting the was still going on but the insurgents appeared to have control over the village. It was not clear how many extremists were involved.

Rahim said the villagers reported that 25 extremists and 18 local residents were killed in the battles and 40 people wounded. The casualty figures could not be independently confirmed.

A resident of the town of Dali Abbas, neighboring Sherween, told AP "the area has come under attack since yesterday, and the people of the village are the only ones defending it." He spoke on condition his name not be used for fear of reprisals.

An Iraqi army officer in the Mansouria region close to Sherween confirmed that insurgents appeared to be in control of the village. He spoke on condition of anonymity because he was not authorized to speak to the press.

Sherween — a village of about 7,000 people, about equally divided between Shiites and Sunnis — lies about 35 miles northwest of Baqouba, where U.S. troops have been fighting a three-week-old offensive to uproot Sunni extremists who use the area to launch attacks in nearby Baghdad.

U.S. commanders say they are making progress in clearing Baqouba, but acknowledge that many militants — including leaders of Al Qaeida's branch in Iraq — fled the city before the assault began in mid-June. After three years of U.S. training, however, the Iraqi army remains incapable of operating on its own, U.S. officials say.

Fleeing insurgents are believed to have headed north to carry out strikes in unprotected areas. On Friday, a suicide bomber hit a Shiite Kurdish village, Zargoush, near Sharween, that killed 22 people.

The next morning, a suicide truck bomber hit the Shiite Turkoman town of Armili, west of the region, killing at least 160 people. The attack raised an outcry that Iraqi security forces were not doing enough to protect vulnerable areas — and calls that residents be given arms.

Baghdad has seen a reduction in attacks over the past week, but the violence elsewhere comes at a sensitive time. The Bush administration is coming under increased pressure for a troop withdrawal ahead of a report by the U.S. ambassador in Iraq and the top American commander to Congress, due in mid-July, on progress in the offensives in and around Baghdad and political reforms to reconcile among Iraq's Shiite, Sunni and Kurdish leaders.

A draft of the report concludes that the government of al-Maliki has not met any of its targets for political, economic and other reform, a U.S. official said, speaking on condition of anonymity because the draft is still under discussion.

Another senior official, however, said President Bush and his advisers already have decided no change in policy is justified yet because there was not enough evidence from Iraq.

Iraqi leaders warned the country could collapse if American troops leave too quickly.

"We have held discussion with members of Congress and explained to them the dangers of a quick pullout and leaving a security vacuum," Foreign Minister Hoshyar Zebari told reporters. "The dangers could be a civil war, dividing the country, regional wars and the collapse of the state."

That sentiment was echoed by leading political figures from the Sunni Arab community, the group that had been the least supportive of the U.S. presence following the collapse of Saddam Hussein's Sunni-dominated government in 2003.

"A hasty withdrawal ... would lead to a crisis that would obliterate all the positive aspects of the U.S. troop deployment," said Salim Abdullah, spokesman for the largest Sunni Arab bloc in parliament.

Sunni legislator Adnan al-Dulaimi said a quick U.S. departure would "destroy Iraq" and that the American presence was necessary to "keep a balance between Iraqi sects" after the wave of Shiite-Sunni reprisal killings which plunged the country to the brink of all-out civil war last year.

"These (U.S.) forces have to stay until (the establishment of) an army and security forces ... capable of achieving peace in all parts of Iraq," al-Dulaimi said.

The idea of arming local forces to fight insurgents has been boosted by successes in Anbar province, where Sunni tribes backed the U.S. united against al-Qaida fighters they opposed for killing civilians. In Diyala province, where Baqouba is located, fighters from the Sunni insurgent group the 1920 Revolution Brigade have cooperated with the U.S. in battling al-Qaida extremists.

The recent attacks and criticism of the Iraqi security forces have fueled the calls. But U.S. commanders say they are moving warily, conscious of the danger of armed groups turning against U.S. forces or becoming combatants in a future intra-Iraqi conflict.

U.S. and British forces also targeted Shiite militants accused in attacks on coalition troops and sectarian killings.

The British military said Tuesday warplanes struck the day before in the southern town of al-Majar al-Kabir near the Iranian border, killing three militants suspected of smuggling weapons into Iraq. Iraqi police officials said a British helicopter strike killed the brother and two guards of radical Shiite cleric Sheik Abu Jamal al-Fartousi, whom the British military accused of being a leader in Iran's elite Quds Force suspected of arming militants.

The U.S. military said American special operations forces in a raid Sunday captured 12 militants in Baghdad who had broken away from the Mahdi Army, the militia of anti-U.S. cleric Muqtada al-Sadr, and had carried out attacks on U.S. and Iraqi troops