Maliki insisted bloodshed in Iraq was decreasing and that his government was making progress in efforts to combat sectarian clashes between Shiites and Sunnis, and attacks by insurgents.“The violence is not increasing. We're not in a civil war. Iraq will never be in a civil war,” he said through an interpreter on CNN's Late Edition. “The violence is in decrease and our security ability is increasing.” But the killings persisted.

Assailants in three cars raked an open-air night market with gunfire Sunday night, killing at least 12 people and wounding 25 others, police said.The gunmen fired indiscriminately at throngs of people at the main market of Khalis, a mostly Shiite town 80 kilometres north of Baghdad, said the Diyala provincial police. Earlier in the day, another six people were killed and 14 wounded when a bomb exploded on the outskirts of the town.

The US military command said two US soldiers were killed — one by small arms fire in eastern Baghdad Sunday afternoon, and the other on Saturday night when the vehicle he was travelling in was hit by a roadside bomb southeast of the capital.

A US official also said a US armoured vehicle was attacked on Sunday outside Tarmiyah, 50 kilometres north of Baghdad, “resulting in casualties”. The official, who spoke on condition of anonymity because the US military command had not yet issued a statement on the incident, could not give details on the number of casualties or their condition.

In downtown Baghdad, a bomb in a minibus exploded outside the Palestine Hotel, killing nine people and wounding 16, while a car bomb outside the offices of a government-run newspaper left three dead and at least 29 wounded, police and witnesses said.

Two back-to-back suicide car bombings in the northern city of Kirkuk — one of which targeted the house of a cousin of Iraq's President Jalal Talabani — killed nine people and wounded 22 Sunday evening, hours after an earlier suicide car bomb killed one person and wounded 16, police in the city said.

In Basra, Iraq's second largest city, 550 kilometres southeast of Baghdad, a motorcycle bomb at an open-air night market killed four people and wounded 15, the governor's office said.

Drive-by shootings also killed two people in Mosul, 360 kilometres northwest of Baghdad, one in Numaniyah, a town near Kut, 160 kilometres southeast of the capital, and another three — reportedly the bodyguards of a member of parliament — in Dujail, 80 kilometres north of the capital, police in both cities said.

In Mahmoudiyay, about 30 kilometres south of Baghdad, police found the handcuffed and blindfolded bodies of eight people in various parts of the city, police said.

The Baghdad car bombs came as the US military said Iraqi and coalition forces were expanding a security operation in the capital that aims to crack down on violence neighbourhood by neighbourhood. Security forces were to conduct a cordon and search operation of all the buildings in the Sunni district of Azamiyah in north Baghdad, the US military command said in a statement.

Since August 7, about 12,000 additional US and Iraqi troops have been brought in to the capital as part of the security effort, dubbed “Operation Together Forward,” and have covered four of the most problematic of the capital's neighborhoods.

The security sweep has already “resulted in a 36 per cent reduction of murders across the city of Baghdad,” said Maj. Gen. James D. Thurman, commander of US forces in Baghdad.British Ambassador to Iraq Dominic Asquith said that while sectarian violence persisted, it had not reached the level of civil war.

“There is no question there is sectarian violence going on, inspired by people who are determined to fan the flames of sectarian violence,” Asquith told reporters. “That sectarian violence is very focused on Baghdad. And you know well that there are large areas of Iraq that are not affected by that sectarian violence. I've spent some of my time in Lebanon in earlier years and this does not look to me like civil war,” he said.

On Saturday, the prime minister appealed to Iraqis to support his national reconciliation plan to end the bloodshed.But the persistent killings showed that his plan is still a distant goal, even though it was endorsed by hundreds of tribal chiefs at a conference on Saturday.

The reconciliation plan seeks to bridge religious, ethnic and political divisions, which are tearing the country with almost daily violence that has left about 10,000 people dead since May when Maliki's government took office.

The plan includes an offer of amnesty to members of the Sunni-led insurgency not involved in terrorist activities, calls for disarming primarily Shiite sectarian factions and promises compensation for families of Iraqis killed by US and government forces.

But no major Sunni Arab insurgent groups has publicly agreed to join the plan, and many Shiite factions are controlled by legislators themselves. Maliki hopes the tribal chiefs can help draw Iraqis away from violence.

AP