A day after President Bush outlined his plans for handing power to Iraqis in a few weeks' time, the obstacles to an orderly transition were apparent as insurgents mounted bomb and rocket attacks in Baghdad.
Militants fired rockets from the window of an apartment building toward a police station and a hotel, setting off thunderous explosions and wounding one American soldier.
A car bomb near a hotel wounded at least five Iraqis, the U.S. military said. The target of the blast, about 100 yards from the Australian Embassy, was not immediately clear.
Elsewhere, a bomb stopped the flow of Iraqi oil to a key export terminal in Turkey, and insurgents bombed a bridge in Numaniya, destroying part of it and disrupting traffic. Clashes in Najaf between U.S. forces and radical Shiite militiamen killed at least 13 Iraqis, and damaged a key Shiite shrine.
With only weeks before the June 30 deadline when U.S. occupation forces hand over limited power to an interim government in Baghdad, Iraqi Planning Minister Mehdi Hafedh acknowledged at a conference of international donors that, "security is, without doubt, the most significant challenge currently facing Iraq."
"The violence is clearly a serious impediment to progress and development in Iraq on every front," he told the conference. "It depresses economic activity and increases the cost."
Leslie Curtin, senior reconstruction adviser for the United States Agency for International Development, said security-related expenses raise project costs by up to 28 percent.
In other developments:
The U.S. plan for post-occupation Iraq, outlined in a draft resolution submitted to the United Nations on Monday, hands over power to an interim Iraqi government on June 30.
But it does not address how much control the government would have over Iraqi security forces, which remain overseen by U.S.-led international troops.
"We found it less than our expectations," council president Ghazi Mashal Ajil al-Yawer told reporters after a gathering to discuss the resolution.
The fighting in Najaf was some of the fiercest since battles erupted there last month.
Eight people were killed and 18 injured in Najaf in fighting overnight and during the day Tuesday, said Seyed Kifah Shemal, an official at Hakim General Hospital. Two people died and 14 were injured in overnight fighting in Kufa, said Riyadh Kadhem, a nurse at the Forat al-Awsat hospital in Kufa. They said the casualties were mostly civilians.
There were no reports of U.S. casualties.
At the damaged Imam Ali mosque — named for the most revered saint among Shiite Muslims — Al-Jazeera television showed an angry crowd of more than 100 shouting and shaking their fists.
Supporters of Shiite militia leader Muqtada al-Sadr accused the Americans firing mortars at the mosque, and said 12 people were injured in the mosque compound. In Baghdad, U.S. Army Brig. Gen. Mark Kimmitt told Al-Jazeera that the shell that fell on the shrine was not American and was not fired by coalition forces.
Fighting in Najaf and other Shiite shrine cities south of Baghdad have raised alarm among Shiite Muslims throughout the world who fear damage to the sacred sites.
Adel Al-Abbasi, a Shiite human rights activist, said violating the holy sites is "a red line" for Shiites. But he noted that the Americans have stayed out of those sites for the past year, raising the possibility that al-Sadr is to blame for having "pushed the Americans toward the shrines."
Al-Sadr launched his uprising in early April after the U.S.-led occupation authority cracked down on him, closing his newspaper, arresting a key aide and announcing a warrant against the young cleric in the 2003 murder of a moderate religious leader.
At the donors' conference, Hafedh said that despite the insecurity, there were a number of achievements.
Electrical power generation had surpassed levels before last year's U.S.-led invasion, as had oil exports, now averaging 1.5 million barrels a day. Hafedh added that 2,500 schools had been renovated, there was a 20 percent increase in telephone lines, and some 1,500 hospitals and clinics were operational.
Ross Mountain, the resident U.N. coordinator on Iraq, appealed to donors to look beyond headlines about violence in Iraq to see what has been achieved.
"Amid the daily media diet of bombs and slaughter, we here need to recognize that there are significant positive developments being accomplished by Iraqis, including with their international partners," Mountain told the conference.