Iraqi police claimed a US convoy opened fire on a car in northern Iraq, while one US soldier died in a mortar strike and two more in a roadside bombing.

The Iraqis were killed Saturday when their car tried to pass a US convoy and the soldiers opened fire on it in the area around former dictator Saddam Hussein's hometown of Tikrit, police said, but American troops in the area denied involvement.

"The car, a grey Chevrolet Caprice, was hit by 27 shots and skidded, resulting in the death of four people, including a woman and a nine year-old child," Tikrit police chief Colonel Ussama Adham Abdel Ghaffer told AFP.

US Lieutenant Colonel Steve Russell, head of the 4th Infantry Division 1-22 battalion that patrols Tikrit, said he knew of a shooting incident with a civilian car, but emphasised that his men were not involved.

A fifth occupant of the car, who survived with chest injuries, also said the vehicle had come under fire from a US convoy.

A US soldier was killed Friday in an attack at Balad, 75 kilometres (45 miles) north of Baghdad, shortly after insurgents in the volatile nearby western town of Fallujah shot down a US helicopter killing one soldier.

However, Blair told British troops they had fought for a "noble and good cause" and that Iraq was a "test case" in the global fight against terror and repression.

The US President Bush's main ally in Iraq, whose political fortunes have wavered due to his backing of the US-led campaign to topple Saddam Hussein, flew into Iraq's second-largest city Basra by military aircraft from the Red Sea resort of Sharm el-Sheik, where he was on vacation with his family.

"This conflict here was a conflict of enormous importance because Iraq was a test case," he told some of the 10,000 British troops stationed in and around Basra, 340 miles southeast of Baghdad. "If we backed away from that, we would never be able to confront this threat in the other countries where it exists."

The United States and Britain cited Saddam's alleged programs to develop chemical, nuclear and biological weapons as a main justification for the war, but have come under criticism as no evidence of such weapons has been found since Saddam was toppled in April.

"No government that owes its position to the will of the people will spend billions of pounds on chemical and biological and nuclear weapons whilst their people live in poverty," Blair said.

"Brutal and repressive states that don't actually have the support or consent of their people that are developing weapons which can cause destruction on a massive scale are a huge, huge liability to the whole security of the world," he said.