The US military said Saturday's raid was aimed at a safe house used by militants led by Abu Musab al-Zarqawi, a Jordanian described by the Americans as al-Qaeda's leader in Iraq.

The air strike, which flattened a house, shattered a lull in Falluja since last month's truce ended bloody battles between US Marines and insurgents. It also fueled tensions ahead of the formal end of Iraq's US-led occupation on June 30.

The US military had allowed an Iraqi force, known as the Falluja Brigade, led by former Iraqi army officers, to take over security in the fiercely anti-American town west of Baghdad.

Brigadier Nouri Aboud, a member of the Falluja Brigade, told Reuters there was no evidence the destroyed house had been used by anyone except the large Iraqi family that lived there.

"We inspected the damage, we looked through the bodies of the women and children and elderly. This was a family," he said.

"There is no sign of foreigners having lived in the house. Zarqawi and his men have no presence in Falluja."

Brigadier General Mark Kimmitt said in Baghdad the house hit by a "precision" strike was being used by fighters loyal to Zarqawi, accused by Washington of leading a bloody campaign of suicide bombings and of decapitating a US hostage last month.

The Iraqi government says foreign militants are involved in sabotage that last week brought vital oil exports to a halt.

Iraqi technicians have been struggling to repair damage to a sabotaged southern pipeline to enable exports to resume.