The U.S. military said jets carried out a precision strike on a site in Fallujah where forces loyal to Jordanian-born terror suspect Abu Muse al-Sarawak were meeting.
The military said reports indicated the strikes had achieved their aim but did not name the operatives.
Witnesses said the bombing targeted the city's residential al-Shurta neighborhood, damaging buildings and raising clouds of black smoke.
Dr. Adel Khamis of the Fallujah General Hospital said at least 16 people were killed, including women and children, and 12 others wounded.
"The conditions here are miserable — an ambulance was bombed, three houses destroyed and men and women killed," the hospital's director, Rafayi Hayad al-Esawi, told Al-Jazeera. "The American army has no morals."
In other developments:
"By God, we intend to meet this date," Ghazi al-Yawer said during a visit to Warsaw, adding that the interim government was "working around the clock" to establish the security and government control needed for elections to be held.
"We are not fighting Iraqis, we are fighting terrorists who are foreigners," al-Yawer said.
"They want to go back to the past," he told reporters after a meeting with Polish President Aleksander Kwasniewski.
In the Fallujah, attacks, witnesses said U.S. warplanes repeatedly swooped low over the city as artillery units deployed on the outskirts of the city opened fire. The explosions started at sunrise and continued for several hours.
One explosion went off in a marketplace in Fallujah as the first vendors began to set up their stalls, wounding several people and shattering windows, witnesses said.
U.S. forces pulled out of Fallujah in April after a three-week siege that left hundreds dead and a trail of devastation. The U.S. Marines have not patrolled inside Fallujah since then and Sunni insurgents have strengthened their hold on the city.
West of Baghdad, assailants broke into a local police station in Latifiyah and forced the handful of officers inside to leave before blowing up the building, police said Monday.
Nobody was injured in the Sunday night blast, said police Lt. Col. Sahi Abdullah. Iraqi police have regularly been attacked by insurgents who view them as collaborators with American troops.
Also Sunday, insurgents hammered central Baghdad with intense mortar and rocket barrages, heralding a day of violence that killed 78 people nationwide as security appeared to spiral out of control.
At least 37 people were killed in Baghdad alone. Many of them died when a U.S. helicopter fired on a disabled U.S. Bradley fighting vehicle as Iraqis swarmed around it, cheering, throwing stones and waving the black and yellow sunburst banner of Iraq's most-feared terror organization.
The dead from the helicopter strike included Arab television reporter Mazen al-Tumeizi. An Iraqi cameraman working for the Reuters news agency and an Iraqi freelance photographer for Getty Images were wounded.
About 30 journalists on Monday demonstrated in the West Bank town of Ramallah to protest the death of al-Tumeizi, a Palestinian.
Naim Tubasi, chief of the Palestinian journalists' union, accused the United States of deliberately killing reporters in Iraq to "block the truth" from reaching the rest of the world.
"The killing of Mazen al-Tumeizi is one more American crime in Iraq," he said, calling for an international investigation of American crimes against journalists in Iraq.
The Health Ministry reported Monday that 78 people were killed in violence across the country Sunday, an increase it said was due to new reports of deaths overnight.
Some 200 people were wounded, more than half of them in Baghdad.
In a visit to the southern city of Basra, interim Prime Minister Ayad Allawi vowed to pursue insurgents.
"We are adamant that we are going to defeat terrorism," Allawi said. "We intend to confront them and bring them to justice."
Powell acknowledged that the U.S.-led coalition faced a "difficult time" in Iraq but said the United States had a plan to quash the insurgency and bring those areas under control in time for national elections in January.
The insurgency "will be brought under control," Powell said on NBC. "It's not an impossible task."