With warplanes pounding the city, U.S. Marines fought their way into the western outskirts of Fallujah (search) on Monday, seizing a hospital and two bridges over the Euphrates River in the first stage of a major assault on the insurgent stronghold.

The U.S. military reported its first casualties of the offensive — two Marines killed when their bulldozer flipped over into the Euphrates River. Ten Iraqis were killed and 11 others injured during the night of fighting in Fallujah, according to doctors.

An AC-130 gunship (search) raked the city all night long with cannon fire as heavy explosions from U.S. artillery continued into Monday morning. Warplanes carried out some two dozen sorties against the city, and four 500-pound bombs were dropped over Fallujah before dawn. Orange fireballs from high explosive airbursts could be seen above the rooftops.

With U.S. forces moving in from the northwest and west sides of the city, commanders said the toughest fight was yet to come: when American forces cross to the east bank of the Euphrates and enter the main part of the city — including the Jolan neighborhood (search) where insurgent defenses are believed the strongest.

U.S. and Iraqi commanders have vowed to stamp out Sunni Muslim guerrillas who control Fallujah, part of a campaign to put down insurgents ahead of vital January elections. Marine commanders have warned the assault could bring the heaviest urban fighting since the Vietnam war.

Two Marine brigades and an Army brigade are currently positioned north of the city, the military said Monday.

By noon, Marines fighting their way into the city secured an apartment building in the northwestern corner of the city, said Capt. Brian Heatherman, of the 3rd Battalion 1st Marine Regiment.

"The Marines have now gained a foothold in the city," said Heatherman, 32, from Laguna Niguel, Calif.

Several hundred Iraqi troops were sent into Fallujah's main hospital after U.S. forces sealed off the area. The troops detained about 50 men of military age inside the hospital, but about half were later released.

The invaders used special tools, powered by .22 caliber blanks, to break open door locks. A rifle-like crackle echoed through the facility. Many patients were herded into hallways and handcuffed until troops determined whether they were insurgents hiding in the hospital.

In an apparent reference to the Iraqi troops, Fallujah clerics issued a statement Monday calling them the "occupiers' lash on their fellow countrymen."

"This statement is our last threat to you. We swear by God that we will stand against you in the streets, we will enter your houses and we will slaughter you just like sheep," the statement said.

The initial attacks on Fallujah began just hours after the Iraqi government declared 60 days of emergency rule throughout most of the country as militants dramatically escalated attacks, killing at least 30 people, including two Americans.

Government negotiators on Sunday reported the failure of last-minute talks for peace, though interim Prime Minister Ayad Allawi said dialogue with Fallujah leaders was still possible, even if a large-scale military action began.

Allawi, a secular-minded Shiite Muslim, has faced strong pressure from within Iraq's minority Sunni community to avoid an all-out assault.

U.N. Secretary-General Kofi Annan and others have warned that a military offensive could trigger a wave of violence that would sabotage the January elections by alienating Sunnis, who form the core of the insurgency. About 60 percent of Iraq's 25 million people are Shiite.

On Monday, the Association of Muslim Scholars, an influential Sunni clerics group, condemned the assault on Fallujah. The group has threatened to boycott elections.

"The attack on Fallujah is an illegal and illegitimate action against civilian and innocent people. We denounce this operation which will have a grave consequences on the situation in Iraq," said spokesman Mohammed Bashar al-Faidhi.

After the seizure of Fallujah Hospital, its director Dr. Salih al-Issawi said he asked U.S. officers to allow doctors and ambulances go inside the main part of the city to help the wounded but they refused. There was no confirmation from the Americans.

"The American troops' attempt to take over the hospital was not right because they thought that they would halt medical assistance to the resistance," he said by telephone to a reporter inside the city. "But they did not realize that the hospital does not belong to anybody, especially the resistance."

During the siege of Fallujah last April, doctors at the hospital were a main source of reports about civilian casualties, which U.S. officials insisted were overblown. Those reports generated strong public outage in Iraq and elsewhere in the Arab world, prompting the Bush administration to call off the offensive.

The assault began after sundown on the outskirts of the city, which has been sealed off by U.S. and Iraqi forces, and the minaret-studded skyline was lit up with huge flashes of light.

As dawn broke Monday over Iraq, the roar of jet aircraft could be heard in Baghdad heading westward toward Fallujah.

"We want to secure the country so elections can be done in a peaceful way and the Iraqi people can participate in the elections freely, without the intimidation by terrorists and by forces who are trying to wreck the political process in Iraq," Allawi told reporters Sunday.

Over the weekend, insurgents launched a wave of attacks, car bombings and suicide blasts against Iraqi police and others in central Iraq — possibly an attempt to divert attention away from Fallujah. About 60 people were killed — including two Americans soldiers — and 75 injured in the attacks Saturday and Sunday.