Sunday's attack on U.S. soldiers outside Fallujah brought to 155 the number of American troops killed in Iraq since President Bush declared an end to major combat on May 1. During the heavy fighting before that date, 138 soldiers died.
"We are not hanging on for the sake of hanging on," said Powell, at a news conference in Baghdad. "We are hanging on because it's necessary to stay with this task until a new government has been created, a responsible government."
Monday, near Tikrit - the hometown of deposed Iraqi president Saddam Hussein, in northern Iraq - dozens of U.S. troops went house to house and wound up arresting five men accused of financing and organizing attacks on U.S. soldiers in Iraq.
"These individuals are involved in financing Fedayeen activity and organizing cells of resistance against U.S. forces," said Maj. Bryan Luke of the Army's 4th Infantry Division. No shots were fired in the early morning raid.
The military has not released any details on Sunday's attack on American soldiers outside Fallujah, but Massoud Ibrahim, a soft drink vendor who says he saw the attack, said rocket-propelled grenades were fired at a U.S. truck and an armored vehicle.
He says a rocket-propelled grenade was also fired at a U.S. helicopter that arrived after the attack. While the helicopter was not hit, it is said to have been unable to land.
An armored vehicle was seen being towed away from the scene.
The attack near Fallujah came a day after angry protesters fired weapons and called for violence against the American occupation to protest Friday's killing of eight Iraqi policemen by U.S. troops who mistook them for enemy guerillas.
L. Paul Bremer, the U.S. administrator for Iraq, spoke publicly about Friday's incident - one of the worst friendly fire incidents of the war - and hinted that the families of the victims might ultimately receive financial compensation.
"The very regrettable incident in Fallujah is still under investigation by our military," Bremer said Sunday, at a news conference with Powell. "When we have reached conclusions about how the incident came about, we'll take appropriate steps."
Fallujah held a one-day strike to protest Friday's shootings, but shops were back open again on Sunday.
The attack on the U.S. convoy Sunday and the friendly fire shooting that killed the Iraqi police officers on Friday are the latest in a long string of incidents in that city, dating back to its capture by U.S. troops in April. U.S. troops came under almost daily attacks for two months after soldiers opened fire in late April on crowds of protesters in the city, killing 18 and injuring 78. The Americans said they were fired at first.
In other recent developments:
The Defense Secretary believes the U.S. is on the right track in Iraq. "This proposal by the President (Bush) really does say, look we have a chance to put that country on a path to democracy, a path toward a representative government," said Rumsfeld, on CBS' "Face The Nation."
Powell arrived in Baghdad on Sunday for his first visit since the U.S.-led ouster of Saddam Hussein. He said he was encouraged by progress toward self-rule.
"There is vibrancy to this effort, a vibrancy that I attribute to the winds of freedom that are now blowing through this land," said Powell, after sitting in on a city council meeting in Baghdad.
Powell at the same time stood firm against growing international pressure to quickly turn responsibility for running the country back to the Iraqis.
"The worst thing that could happen is for us to push this process too quickly before the capacity for governance is there and the basis for legitimacy is there and see it fail," Powell said.
Earlier Sunday, Powell met with Hoshyar Zebari, Iraq's new foreign minister, and said the security situation remained challenging, with a "major new threat" coming from "terrorists who are trying to infiltrate into the country for the purpose of disrupting this whole process."