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Posted: Wednesday November 10,2004 - 07:41:37 am

By EDWARD HARRIS, Associated Press Writer

FALLUJAH, Iraq - U.S. forces bottled up insurgents in a narrow strip of Fallujah on Wednesday after a stunningly swift advance that seized control of 70 percent of the militant stronghold. Kidnappers abducted two members of Prime Minister Ayad Allawi's family in Baghdad.

Reuters Photo Slideshow: Iraq U.S. Forces Hold 70 Percent of Fallujah(AP Video) Latest headlines: · U.S. Takes 'Half Falluja,' Allawi Cousin Kidnapped Reuters - 3 minutes ago · Iraq Troops Find 'Hostage Slaughterhouses' AP - 3 minutes ago · U.S. Forces Hold 70 Percent of Fallujah AP - 11 minutes ago Special Coverage

Iraqi troops, meanwhile, have found "hostage slaughter houses" in Fallujah, including CDs and records of people taken captive in the way of kidnappings and beheadings, an Iraqi military official said.

Maj. Gen. Abdul Qader Mohammed Jassem Mohan, commander of Iraqi forces in the battle, said the houses were located in the northern part of Fallujah, where U.S. officials had expected to meet their toughest resistance.

"We have found hostage slaughter houses in Fallujah that were used by these people (kidnappers) and the black clothing that they used to wear to identify themselves, hundreds of CDs and whole records with names of hostages," the general told reporters at a military camp near Fallujah.

He was unsure if the hostage records included the names of missing British aide worker Margaret Hassan or missing French journalists Christian Chesnot and Georges Malbrunot.

The speed of the U.S. drive may indicate that most Sunni fighters and their leaders abandoned the city before the offensive and moved elsewhere to carry on the fight, officers said.

At a U.S. camp outside Fallujah, government spokesman Thair al-Naqeeb said "many armed groups" in the city had asked to surrender and that Iraqi authorities "will extend amnesty" to those who have not committed major crimes.

Meanwhile, a wave of insurgent violence in other parts of Iraq continued, with at least 18 people killed in fighting Wednesday, including an U.S. soldier and a foreign contractor. Authorities clamped an immediate curfew on the northern city of Mosul as U.S. and Iraqi forces clashed with gunmen there. Fierce fighting also took place in Baghdad, to the south and in Ramadi, a Sunni stronghold where explosions shook the city as U.S. troops and gunmen battled near the main government building.

The insurgents have been seeking to open a "second front" to divert U.S. and Iraqi forces from the Fallujah offensive. The kidnapping of Allawi's cousin, Ghazi Allawi, and the cousin's daughter-in-law may be part of the campaign.

Armed men snatched the two from their home in Baghdad Tuesday night, al-Naqeeb said. The next day a militant group calling itself the Ansar al-Jihad threatened to behead the hostages within 48 hours unless the Fallujah siege was ended. The group's claim to be holding the captives could not be verified.

Still, U.S. and Iraqi troops were pushing ahead in Fallujah. Maj. Francis Piccoli, of the 1st Marine Expeditionary Force, said U.S. forces now control 70 percent of the city and had pushed insurgents into a narrow section flanking the main east-west highway bisecting the city.

He said troops would move on that strip of territory Wednesday. "The heart of the city is what's in focus now," he said.

At least 71 militants have been killed as of the beginning of the third day of intense urban combat, the military said. As of Tuesday night, 10 U.S. troops and two members of the Iraqi security forces had been killed. Marine reports Wednesday said 25 American troops and 16 Iraqi soldiers were wounded.

U.S. and Iraqi forces seized Fallujah's city hall compound before dawn after a gunbattle with insurgents who hit a U.S. tanks with anti-armor rockets. Iraqi soldiers swept into a police station in the compound and raised a flag above it.

Gunmen fired on troops from a mosque minaret, sparking a battle there, BBC's embedded correspondent Paul Wood reported. Marines said the insurgents waved a white flag at one stage but then opened fire, prompting the Marines to call in airstrikes, Wood said.

Tank gunners opened fire on insurgents in a nearby five-story apartment building, and flames shot from several windows of the building.

Residents reported heavy clashes and artillery shelling in the Jolan and Jumhuriya neighborhood, along the central highway.

Dead bodies lay on the streets of Jumhuriya, with dogs hovering around them, witnesses said. Residents said they were running out of food in a city that had its electricity cut two days ago.

Lt. Gen. John F. Sattler, the commanding general of the 1st Marine Expeditionary Force, visited the battlefield Wednesday with an Iraqi general and said the insurgents in Fallujah are in disarray.

"We are very comfortable with where we are," he said.

Lt. Gen. Thomas Metz, the top U.S. commander in Iraq, said Tuesday he believed the most wanted militant leader, Abu Musab al-Zarqawi, had escaped Fallujah. He predicted "several more days of tough urban fighting" in the city.

Most insurgents likely fled the city before the assault began so they could fight elswhere, officers said Wednesday. Iraqi and U.S. commanders had been warning for weeks that they invade Fallujah to re-establish government control.

"That's probably why we've been able to move as fast as we have," said one officer from the Army's 1st Cavalry Division, who asked not to be named.

Fallujah's defenses have crumbled faster than U.S. commanders expected, With their command networks broken down, bands of three to five guerrillas were left fighting for self-preservation rather than as part of a larger force, officials said.

About 100 men, women and children made their way to American positions in the south of the city and gave themselves up Wednesday, an officer from the Army's 1st Cavalry Division said. The group was to be searched for weapons and questioned, and all military-age men would be detained, the officer said.

Most of Fallujah's 200,000 to 300,000 residents are believed to have fled the city before the U.S. assault. Civilian casualties in the attack are not known, though U.S. commanders say they believe they are low.

The U.S. advance in Fallujah was more rapid than in an offensive in April, when insurgents fought a force of fewer than 2,000 Marines to a standstill in a three-week siege. It ended with the Americans handing over the city to a local force, which lost control to Islamic militants.

This time, the U.S. military has sent up to 15,000 U.S. and Iraqi troops into the battle, backed by tanks, artillery and attack aircraft.

If reports that most gunmen fled the city are true, it indicated that while the new offensive may cost the insurgency its strongest bastion, the fighters will seek to continue their campaign of violence elsewhere.

In Mosul, the curfew came after a series of clashes including two attacks against American military convoys, U.S. Capt. Angela Bowman said. A foreign contractor was killed in one of the attacks, Bowman said, without giving details.

Smoke was seen rising above the rooftops as residents reported fighting in western districts. Three Iraqi policemen and an Iraqi National Guard soldier were killed, hospital and security officials said.

In Baghdad — where Allawi this week imposed a nighttime curfew for the first time in a year — U.S. troops and masked fighters traded fire, wounding four bystanders. Six people were killed and four others wounded during clashes between U.S. soldiers and insurgents in Latifiyah, south of Baghdad.

A U.S. soldier was killed and another wounded by a roadside bomb north of Baghdad on Wednesday, and a bomb killed six Iraqi soldiers in northern Iraq. At least 13 Americans have been killed in attacks outside Fallujah since Monday.

Al-Naqeeb, the government spokesman, denounced the abduction of the prime minister's two family members.

Ghazi Allawi "is 75 years old. He has no political affiliation and is not holding a government post," al-Naqeeb said.

Ansar al-Jihad claimed in a Web posting to have carried out the kidnapping and threatened to behead the hostages within 48 hours unless the siege of Fallujah was lifted and prisoners were freed.

Ansar al-Jihad said it abducted three people — a cousin of Allawi, the cousin's wife and another relative. Initial police reports, later corrected by the government, had said three people were kidnapped.

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Contributing to this report were Associated Press writers Jim Krane near Fallujah; and Tini Tran, Sameer N. Yacoub, Mariam Fam, Sabah Jerges, Katarina Kratovac and Maggie Michael in Baghdad