The operation, dubbed "Sidewinder," is taking place in a huge swath of central Iraq stretching from the Iranian border to the areas north of Baghdad, and is expected to last for several days, the military said.
The region has become "the nexus of paramilitary activity in central Iraq," the military said in a statement.
"Sidewinder" kicked off at about 2 a.m. Sunday, according to military officials in Camp Boom, near Baqouba, 35 miles northeast of Baghdad.
"We go in with such overwhelming combat power that they won't even think about shooting us," Lt. Col. Mark Young said before the start of the operation.
"The raids target former Baath Party loyalists, terrorists suspected of perpetrating attacks against U.S. forces and former Iraqi military leaders," the military statement said, referring to Saddam Hussein's once-ruling party.
The American forces arrested a man in Khalis, 45 miles north of Baghdad, suspected of recruiting young men to launch attacks on U.S. troops. In Dojima, an upscale town where Sunni Muslim residents recently polished the still-standing portrait of Saddam Hussein, police raided the homes of alleged Saddam loyalists they suspected of hiding caches of arms, including rocket-propelled grenades — the weapon of choice in many recent ambushes.
There were no reports on U.S. casualties, the military said, nor was their any indication that the operation had netted any of Iraq's most wanted fugitives.
U.S. officials in Washington have said repeatedly that no centralized Iraqi resistance to American rule remains. But on the ground, U.S. military personnel face "an organized effort," said Young.
"Somewhere in Diala province, something happens every night," said Captain John Wrann, referring to the area northeast of Baghdad where much of the operation was taking place. "It's got to be a coordinated thing."
The military also announced the arrest Saturday of 15 suspects in Mosul, in northern Iraq, confiscating Baath party documents and Republican Guard uniforms, as well as weapons.
Insurgents have stepped up their attacks against U.S. troops in recent days, carrying out ambushes against military convoys, shooting soldiers, and lobbing grenades.
Early Sunday, two American troops were injured and an Iraqi civilian was killed in an attack on a U.S. military convoy on a road leading to Baghdad International Airport, the military said.
The attack, which involved an improvised explosive device, occurred as the convoy made its way on a highway in southwest Baghdad that heads out to the airport, said Cpl. Todd Pruden, a military spokesman. He said it was not clear if the explosive device was thrown at the convoy, or placed in the road. Two vehicles were damaged
The injured were evacuated to a military hospital and no arrests were made. The identity of the Iraqi civilian was not released, nor was it clear if the victim was a passer-by or had been traveling with the soldiers at the time of the attack.
In other violence, insurgents ambushed a U.S. patrol west of Baghdad using rocket propelled grenades on Sunday.
One of the grenades struck a Bradley fighting vehicle patrolling near Khaldiyah, some 35 miles west of Baghdad, but didn't cause any significant damage or injuries. U.S. troops returned fire with 25 mm cannon, but apparently failed to inflict any casualties on the attackers, who ran away.
Meanwhile, the remains of two missing soldiers were found 20 miles northwest of the capital on Saturday morning, while their Humvee was recovered Friday in another location nearby, a senior Pentagon official said on condition of anonymity.
Sgt. 1st Class Gladimir Philippe, 37, of Roselle, N.J., and Pfc. Kevin Ott, 27, of Columbus, Ohio, were last seen Wednesday at their post in the town of Balad, 25 miles north of Baghdad.
Some of the soldiers' personal items were found during a house-to-house search in the area on Friday, and a total of 12 Iraqis have been taken into custody, the U.S. military said from Baghdad.
Also on Sunday, L. Paul Bremer, the top U.S. official in Iraq, said progress was being made in restoring basic services to the country and health care, water and power supplies were improving.
Bremer said 240 hospitals across the country and 95 percent of health clinics were now operating. In an interview with the British Broadcasting Corp., he said Baghdad now had 18 to 20 hours of electricity a day.
Speaking from Iraq, he added, that law and order had to be restored, to ensure the country could be rebuilt.
"Am I satisfied? No," said Bremer, "We will do our best and we will succeed. I do not know when that will be."
The recent U.S. soldiers' deaths bring to at least 63 the number of U.S. troops killed in Iraq since major combat was declared over on May 1. The military has confirmed the identities of 138 soldiers killed before that date, for a total of 201 so far, while the names of several other casualties have not yet been made available.
Also Saturday, British forces were greeted peacefully as they returned to a southern Shiite town where six of their troops were killed in clashes. Some 42 British troops have died in the current conflict. The American death toll was still far below the 382 U.S. troops killed in the 1991 Gulf War.
It is impossible to know how many Iraqi soldiers have died since the war started on March 20. An Associated Press investigation completed earlier this month found that at least 3,240 civilians died throughout the country.
The persistent drumbeat of guerrilla-style attacks and sabotage also has raised doubts about the coalition's mission in Iraq. Senate Democrats in Washington have called for an inquiry into the credibility of prewar intelligence on Iraq's weapons of mass destruction and its links to the al Qaeda terror network.
Defense Secretary Donald H. Rumsfeld on Friday blamed the violence on scattered, disorganized remnants of the ousted Saddam Hussein government. Secretary of State Colin Powell pointed to a combination of leftover Baath Party members, Fedayeen fighters and criminals who loot and steal in Iraq "taking it out on soldiers."