An Iraqi boy looks at a body next to a burned-out car on a Baghdad street following an air strike on the city yesterday. At least 15 people were killed and 30 wounded in an apparent US air strike on a residential and commercial street

Photograph: Goran Tomasevic?Reuters

• Central Bank warns prices 12% above euro zone average

  The level of consumer prices in the Republic is now more than 12 per cent above the euro zone average, highlighting a sharp deterioration in competitiveness, the Central Bank has warned, writes Cliff Taylor , Economics Editor

• Major battle looms as Iraqi forces move south

  The expected major confrontation between US-led coalition forces and Iraqi troops drew closer late last night as a contingent of the Republican Guard headed south from Baghdad in a 1,000-vehicle convoy, under cover of a  sandstorm, toward US Marines in central Iraq.

• 'We did nothing. We are innocent... Why are they doing this to us?'

  There were body parts and pools of blood on the pavements of ash-Shaab, a working class suburb of north-west Baghdad yesterday, after a US aircraft is believed to have fired two missiles into a busy shopping and residential area. Lara Marlowe hears witnesses tell of the attack on the ash-Shaab market

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