Shias take control of key city areas as battles rage

US-led troops fought fierce battles with Sunni and Shi'ite rebels today and a spate of kidnappings hit foreigners as Iraq descended…

US-led troops fought fierce battles with Sunni and Shi'ite rebels today and a spate of kidnappings hit foreigners as Iraq descended into bloody chaos not seen since Saddam Hussein's fall a year ago.

A previously unknown Iraqi group said it was holding three Japanese hostages and threatened to "burn them alive" unless Tokyo withdrew its troops from Iraq within three days.

Rebels seized two Palestinian Arabs with Israeli identity cards, shown on a video tape aired by an Iranian television station, and accused them of spying. A Briton was missing after being kidnapped in the southern town of Nassiriya.

Seven South Koreans were seized by armed men while doing missionary work but were later freed unharmed, the Foreign Ministry in Seoul said. They were taken hostage near Baghdad.

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The top US general in Iraq, Lieutenant General Ricardo Sanchez, acknowledged the southern towns of Najaf and Kut were in the hands of a militia loyal to radical Shi'ite Muslim cleric Moqtada al-Sadr.

Heavy fighting raged in the Sunni town of Falluja, west of Baghdad, in the Shi'ite shrine city of Kerbala and in Abu Ghraib on the western outskirts of the capital, witnesses said.

The upsurge in violence has prompted President George W. Bush's critics to suggest US  forces face a Vietnam-style quagmire, but Sanchez rejected the comparison. "I don't see any shadows of Vietnam in Iraq," Lt Gen Sanchez told a news conference. "We have got Falluja under siege," he said, but denied that US  forces were depriving its people of humanitarian supplies.

Up to 300 Iraqis have been killed and at least 400 hurt in the Sunni town in the four days since US  Marines began a crackdown on guerrillas.

The Marines launched "Operation Iron Resolve" after last week's killing and mutilation of four US  private security guards showed the depth of anti-American feeling in Falluja.

South of Baghdad, Polish and Bulgarian troops battled followers of Sadr in the shrine city of Kerbala, where hundreds of thousands of pilgrims have converged for Arbain, a major Shi'ite religious occasion.

Sadr's Mehdi Army militia controlled the centres of Najaf and Kut, along with police stations and public buildings, while US-led forces held bases outside the towns.      Thirty-five 35 American and allied soldiers and hundreds of Iraqis have been killed in this week's new two-front fighting in Iraq. Previously violence had been largely confined to Sunni areas.

Mr  Bush has vowed the violence will not force the United States to retreat from Baghdad or disrupt its planned handover of power to Iraqis on June 30th, but signs of nervousness have emerged among some other countries with troops in Iraq.

The rash of kidnappings will probably cause more soul-searching among US  allies. About 125,000 US  troops and some 20,000 from other nations, including Britain, Japan and South Korea, are in Iraq.

Al Jazeera television aired a video tape showing the three Japanese, including a woman, who are being held by a group calling itself the Saraya al-Mujahideen (Mujahideen Brigades). They were in civilian clothes.

"We tell you that three of your children have fallen prisoner in our hands and we give you two options - withdraw your forces from our country and go home or we will burn them alive and feed them to the fighters," the group said.

A Foreign Office official in London confirmed that Gary Teeley had been missing since Monday. British media said the 37-year-old Briton had been working at a US  air base.

Iran's Al-Alam television said the two Arabs with Israeli papers, Nabil Razuq and Ahmed Tikati, had been seized by a group calling itself Ansar al-Din. Razuq's uncle said his nephew worked for the US  Agency for International Development.

Israeli cabinet minister Gideon Ezra said both men were residents of East Jerusalem, but were not Israeli citizens.

This week's sudden Shi'ite uprising, coinciding with the US  crackdown on Sunni towns like Falluja and Ramadi, has drawn some expressions of Sunni-Shi'ite solidarity, but it is not clear whether the rebel groups are coordinating.

Thousands of Sunni and Shi'ite protesters gathered outside Baghdad's Um al-Qura mosque, chanting slogans in support of people in Falluja, Kerbala and other conflict zones. Similar rallies took place in Mosul and Baquba, north of the capital