U.S. troops have "isolated Fallujah" and all traffic in and out of the city has been halted after the Iraqi government ordered emergency rule in most of the country, the U.S. military said.
A U.S. statement said that in accordance with the emergency decree, which the Iraqi government announced earlier Sunday, the Army's 1st Cavalry Division 2nd Brigade Combat Team "isolated Fallujah and all traffic is being halted."
The statement added that U.S. forces were "finishing final preparations for an assault on Fallujah."
U.S. officials also said insurgents had stepped up their use of mortar and other "indirect fire" against American positions around the city in the last 24 hours and had launched more coordinated attacks against U.S. checkpoints.
The interim Iraqi government declared a 60-day state of emergency throughout most of the country Sunday, as insurgents escalated a wave of violence that has killed more than 50 people the past two days.
Heavy explosions were heard in Baghdad as government spokesman Thair Hassan al-Naqeeb announced the state of emergency over the entire country except Kurdish areas in the north.
"It is going to be a curfew. It is going to be so many things, but tomorrow the prime minister will mention it," he said. Interim Prime Minister Ayad Allawi will give more details Monday, he said.
The statement came as insurgents carried out a second day of assaults in central Iraq, attacking police stations, gunning down government officials and setting off bombs.
Two attacks on U.S. convoys in and around Baghdad killed one American soldier and wounded another Sunday, the military said. Residents reported grenades setting police cars aflame on Haifa Street in the heart of the city.
A car bomb also exploded near the Baghdad home of Iraq's finance minister, Adil Abdel-Mahdi, a leading Shiite politician, the Interior Ministry said.
Reda Jawad Taqqi, a spokesman for a major Shiite political party, said that neither Abdel-Mahdi nor any of his family were in his house at the time. "They are all safe, thank God, the minister and his family," Taqqi told the Associated Press.
The U.S. military said the bomb killed one Iraqi bystander and wounded another. A U.S. patrol came under small-arms fire as it responded, wounding one soldier, a statement said.
The wave of violence sweeping the troubled Sunni Triangle north and west of Baghdad may be aimed at relieving pressure on Fallujah, where about 10,000 American troops are massing for a major assault if Allawi gives the green light.
At dawn Sunday, armed rebels launched deadly attacks against police stations in western Anbar province, killing 22 people according to police and hospital officials. At least seven of those killed were policemen, who were lined up and shot execution style.
Using bombs and small arms fire, insurgents hit three police stations in the neighboring towns of Haditha and Haqlaniyah, 137 miles northwest of Baghdad, said Capt. Nasser Abdullah of the K3 police station in Haqlaniyah.
Also Sunday, three Diyala provincial officials were gunned down south of Baghdad as they were on their way to a funeral in Karbala for a fourth colleague assassinated earlier this week. Governor's aide Jassim Mohammed was killed along with Diyala provincial council members, Shihab Ahmed and Dureid Mohammed, an Iraqi official said.
The attacks came a day after insurgents in Samarra stormed a police station, triggered at least two suicide car bombs and fired mortars at government installations. Twenty-nine people, including 17 police and 12 Iraqi civilians, were killed throughout the city, the U.S. military said. Forty others were injured.
A suicide bomber using an explosive-packed Iraqi police car rammed a U.S. convoy in Ramadi, wounding 16 American soldiers, according to the military.
On Thursday, militants dressed as policemen abducted and executed a group of 12 Iraqi National Guardsmen who driving home in a convoy to Najad, a top Shiite political party said Sunday.
Early Sunday, Marines fired a barrage of artillery at rebel positions inside Fallujah and clashed with insurgents carrying AK-47s, killing at least 16. Two U.S. soldiers were wounded at midnight at a checkpoint near Fallujah, the U.S. military said.
U.S. jets have been pounding the rebel bastion for days, launching its heaviest airstrikes in six months on Saturday — including five 500-pound bombs dropped on insurgent targets. Warplanes destroyed five weapons caches after nightfall Saturday.
In Web postings, the al Qaeda affiliate group of Abu Musab al-Zarqawi claimed responsibility for the attacks in Samarra, Ramadi and Baghdad. The claims could not be verified, but U.S. officials believe al-Zarqawi's group uses Fallujah as a base.
U.S. intelligence estimates there are about 3,000 insurgents dug in behind defenses and booby traps in Fallujah, a city of about 300,000 which has become a symbol throughout the Islamic world of Iraqi resistance to the U.S.-led occupation.
On Sunday, Lt. Gen. John F. Sattler, commanding general of the 1st Marine Expeditionary Force, gave a rousing pep talk before 2,000 to 3,000 Marines at a base near Fallujah.
"You can feel the energy. You can feel the chemistry. You're going to give that to the Iraqi forces as they join that fight. God bless you, each and everyone. You know what your mission is. Go out there and get it done," he said.
U.N. Secretary-General Kofi Annan and others have warned that a military offensive could trigger a wave of violence that would sabotage the ballot.
The influential Sunni clerical Association of Muslim Scholars has threatened to call a boycott of elections if Fallujah is attacked. A public outcry over civilian casualties prompted the Bush administration to call off a siege in April, after which Fallujah fell under control of radical clerics.
The violence in Samarra underscored the difficulty of maintaining civilian authority in Sunni areas even after the worst of the fighting ebbs.
"The experience that occurred in Samarra is now being repeated again in Fallujah, and we can see that nothing was achieved in Samarra," Ayad al-Samaraei of the Sunni-led Iraqi Islamic party told Al-Jazeera television. "The situation is still as it was before" in Samarra.
"I cannot claim that entering Fallujah will end the terrorist attacks in Iraq," Iraq's national security adviser, Qassem Dawoud, told Al-Arabiya television. "But I can say that we will deal with a very big pocket of terrorism in Iraq and we will uproot it. This pocket forms the backbone and the center for terrorists in other areas in Iraq."
In other developments: