U.S. troops sweeping through Fallujah found what appeared to be a key command center of terror mastermind Abu Musab al-Zarqawi, along with a workshop where an SUV registered in Texas was being converted into a bomb and a classroom containing flight plans and instructions on shooting down planes.
Gunbattles flared as troops hunted holdout insurgents in the city west of Baghdad. One U.S. Marine and one Iraqi soldier were killed, U.S. officials said.
Meanwhile, Iraqi forces backed by U.S. soldiers stormed a major Sunni Muslim mosque in Baghdad after Friday prayers, opening fire and killing at least three people, according to eyewitnesses.
About 40 people were arrested during the raid at the Abu Hanifa mosque in the capital's northwestern Azamiyah neighborhood, witnesses said. Another five people were wounded.
In northern Mosul, Iraqi commandos backed by U.S. forces raided a hospital allegedly used by insurgents, and detained three people overnight, the U.S. military said Friday.
In other recent developments:
At al-Zarqawi's alleged headquarters in Fallujah, U.S. soldiers found documents, old computers, notebooks, photographs and copies of the Quran. Several bodies also were found.
There were also two letters, one from al-Zarqawi giving instructions to two of his lieutenants. Another sought money and help from the terrorist leader.
In video shot by an embedded CNN cameraman, soldiers walked through an imposing building with concrete columns and with a large sign in Arabic on the wall reading "Al Qaeda Organization" and "There is no God but Allah and Muhammad is his messenger."
"The fighters there were determined, were very skilled," Maj. David Johnson told CBS News Correspondent Lee Cowan. "You could tell they weren't just run of the mill guys."
Johnson called it a major find, and said it was one of the rare times troops have gone back into a neighborhood and not come under fire again.
"Where we've gone, through an area and cleared it, but can't necessarily leave it completely manned, they pop up again," Johnson said.
Nearby, in another location in the industrial section of southeastern Fallujah, troops found a bomb-making workshop where a sport utility vehicle with a Texas registration sticker was being rigged as a car bomb. CNN's video also showed a makeshift classroom for training militants that included flight plans and instructions on how to shoot down aircraft.
The SUV was sitting in a warehouse surrounded by several bags of sodium nitrate, which can be used to make explosives. The vehicle had no license plate, but some 15 license plates were inside. Several bodies were also found in that area.
The U.S. casualty toll in the Fallujah offensive stood at 51 dead and about 425 wounded. An estimated 1,200 insurgents have been killed, with about 1,025 enemy fighters detained, the military says.
Lt. Gen. John Sattler, commander of the 1st Marine Expeditionary Force, said those who fled lack the resources available in their former stronghold.
"We feel right now that we have, as I mentioned, broken the back of the insurgency. We've taken away this safe haven," he told reporters at a base outside Fallujah.
In Mosul, commandos with the Ministry of Interior's Special Police Force cordoned off the al-Zaharawi Hospital in the western Shefa neighborhood on Thursday, after getting information that insurgents were treating their wounded there, said Lt. Col. Paul Hastings with Task Force Olympia.
U.S. forces from the 1st Battalion, 24th Infantry Regiment secured the area around the hospital, while Iraqi troops raided the building, detaining three individuals suspected of terrorist activities.
Pictures were taken of 23 bodies in the morgue believed to have been members of a terrorist cell, Hastings said, adding it was unclear how they came to be there.
"You can call it an insurgent hospital from what we found there," he said.
U.S. and Iraqi forces began a major military operation Tuesday to wrest control of the western part of Mosul after gunmen last week attacked police stations, bridges and political offices in apparent support of Fallujah guerrillas.
On Friday, three of the five bridges had been reopened to traffic and most of the city remained calm, though U.S. forces came under some "indirect fire" that caused no injuries, Hastings said.