The president of the U.S.-appointed Iraqi Governing Council urged Washington on Sunday to call up Iraq's pre-war army and police force to help stabilize the country as two more U.S. soldiers were killed.

"The coalition's early decision to abolish the army and police was well intended, but it unfortunately resulted in a security vacuum that let criminals, die-hards of the former regime and international terrorists flourish," said Iyad Allawi.

Writing in The New York Times, he said members of a 300,000-strong army that served Saddam Hussein could be vetted "to remove those who committed crimes under the old regime."

"Ultimately only Iraqis themselves can restore security, rebuild national institutions, enact a constitution and elect a democratic government," said Allawi, who holds the presidency under a rotation deal.

"America must not rebuff Iraqis who are eager to have a stake in this intimate national process. Like any free people, we want to ensure that we are in control of our own destiny."

A total of 103 U.S. soldiers have been killed by hostile fire in Iraq since President Bush declared major combat over on May 1. Washington blames the attacks on Saddam supporters and what it calls foreign terrorists.

"Any American-led military presence, even if complemented by the United Nations, will never have the credibility and legitimacy that the Iraqi Army has among the people," said Allawi.

He said former Iraqi governing institutions should be reactivated, including the interior, justice, finance, oil and education ministries, and urged Washington not to stop Iraqi sovereignty until a constitution was produced.

COMPLEX TASK

Under a U.S. resolution passed by the U.N. Security Council last week, the 25-member Iraqi Governing Council must produce by December 15 a timetable for the complex task of drafting a constitution and holding elections. The Governing Council is drawn from Iraq's different religious and ethnic groups.

The U.S. military said two 4th Infantry Division soldiers were killed and one was wounded when their patrol came under small arms and rocket-propelled grenade fire late on Saturday near the northern oil city of Kirkuk.

In Falluja, west of Baghdad, gunmen attacked a U.S. military convoy on Sunday, setting ablaze a truck carrying ammunition and sparking a series of explosions, a Reuters photographer at the scene said.

The gunmen fired on U.S. soldiers caught in the blast and American troops returned fire. The explosions sent flaming shrapnel and plumes of black smoke into the air. Six wounded Iraqis were taken to hospital in Falluja and one later died, hospital officials said.

The U.S. military said there were no American casualties.

A crowd of jubilant Iraqi men and boys gathered at the scene, shouting: "Falluja has destroyed the Americans."

In Baquba, north of Baghdad, one Iraqi was killed and 19 were wounded when a roadside bomb planted to hit U.S. forces exploded as Iraqi police were evacuating the area, a police officer in the town told Reuters.

American troops killed three Iraqis who attacked their convoy in Hawija, south of Kirkuk, the U.S. military said.

BUSH WARNS ON TERROR

The unrelenting violence coincided with fresh threats purportedly made by Osama bin Laden in an audio tape. Bush seized on the remarks to rally support for his war on terror.

The speaker on the audio tape, broadcast by the Arabic Al Jazeera channel on Saturday, threatened more suicide attacks inside and outside the United States, and warned all countries backing Washington over Iraq that they were targets.

He urged Iraqis to wage a holy war on American "crusaders" until an Islamic government was set up in Baghdad.

"I think that the bin Laden tape should say to everybody the war on terror goes on... that free nations need to work together more than ever to share intelligence, cut off money, and bring these potential killers, or killers, to justice," Bush said in Bangkok, where he was attending an Asian-Pacific summit.

The latest violence was a grim backdrop before a conference in Madrid this week where donors will be asked to contribute to reconstruction costs in Iraq estimated at $55 billion.

Bush sought last week's U.N. resolution in an effort to persuade more countries to contribute troops and cash. But heavyweights such as France, Russia and Germany say Washington should have gone further in expanding the political role of the United Nations and accelerating the transfer of power to Iraq.

Guerrillas are most active against U.S. forces in a so-called Sunni Muslim "triangle" north and west of Baghdad, home to Saddam's tribal network. The U.S. military, hunting for Saddam after ousting him from power in April, reported 30 attacks on Saturday alone.

Shi'ite Muslims make up the majority of Iraq's population and were repressed by Saddam, a Sunni. Shi'ite areas have been generally peaceful since U.S.-led forces occupied the country.

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