"There's more that needs to be done" Khalilzad told reporters. "There's a need for practical steps to move forward. ... I think they're heading in the right direction and this is the right government ... to tackle this issue of sectarian fighting."

Both Khalilzad and Casey were in Tikrit for ceremonies marking the formal transfer of security responsibility from the 101st Airborne Division to the Iraqi army across a wide area of northern Iraq.

U.S. officials emphasized the transfer of authority was on schedule despite the security crisis in Baghdad.

Nevertheless, the ambassador warned that if the violence cannot be curbed in the Baghdad area, Iraq "might be in a much more difficult situation" in the coming months. He said al-Maliki understands the threat and "he's determined to succeed."

However, differences have emerged between U.S. and Iraqi officials on tactics. The prime minister, a Shiite, strongly criticized a U.S.-Iraqi raid Monday on Baghdad's Sadr City district, stronghold of radical cleric Muqtada al-Sadr and his Mahdi Army militia.

Al-Maliki complained that the raid used excessive force, and President Jalal Talabani, a Sunni Kurd, warned the Americans it was in "no one's interest" to provoke a showdown with al-Sadr.

For his part, al-Sadr urged his followers to purge their ranks of "all elements that defame the Mahdi Army" and called on his supporters to denounce kidnappings and the "killing of innocent people."

But such declarations alone will do little to curb the violence, much of which is believed carried out by criminal gangs and freelance gunmen settling personal scores.

On Tuesday, gunmen in two cars stormed a bank in the Azamiyah district of Baghdad, killing three bank employees before fleeing with the equivalent of $5,500, according to the Defense Ministry.

Two Sunni bothers were slain in their car repair shop in southwestern Baghdad and four Shiites were gunned down in a series of attacks in Baqouba and Muqdadiyah, two cities in Diyala province northeast of the capital, police said.

Police found two bodies, shot in the head, in Sulla in northwest Baghdad, and a policeman was killed in a bombing in Tikrit, police said.

The other victims died in small-scale shootings and bombings in the Baghdad area, police said.