The top commander of U.S. forces in Iraq briefed President Bush on the war from inside one of Saddam Hussein's ornate palaces on Wednesday, underscoring the death of the old regime. At home, the administration reduced the terrorist threat a notch, from orange to yellow.
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Bush urged the United Nations to lift economic sanctions against Iraq, saying the country had been liberated by U.S.-led forces. "Terrorists and tyrants have now been put on notice," he added.
Four weeks after the war began, American troops in Baghdad raided the home of the mastermind of Iraq's biological weapons laboratory and discovered a recently abandoned terrorist training camp operated by Palestinians and the Iraqi government.
Army forces exchanged fire with a small number of die-hard paramilitary fighters north of Baghdad, then took out two surface-to-air missile systems and three anti-aircraft guns left over from Saddam's military.
Iraqis in Mosul said three people were killed and at least 11 wounded when shooting erupted for the second straight day. Iraqis blamed the Americans, but the circumstances were cloudy.
Gen. Tommy Franks, in command of more than 200,000 troops in the war zone, lit up a cigar as he toured the palace just outside Baghdad that had been part of Saddam's realm. Franks and other senior officers sat in plush green chairs with gold, wood trim for the briefing with Bush in Washington, held over a secure videoconference linkup.
Earlier, the four-star general viewed, with evident disgust, gold sink fixtures, a gold toilet paper dispenser and a toilet bowl brush inside one of the bathrooms.
"It's the oil for palace program," he said, a biting reference to the U.N. program that allowed Iraqi oil exports on condition that the proceeds went to food for civilians.
Franks' visit to Baghdad, from his command headquarters in Qatar, came less than two weeks after Army tanks first rumbled through the capital and one week after Iraqis, aided by Marines, toppled a statue of Saddam in a downtown city square, signaling the end of his regime.
Saddam twice was the target of U.S. bombs dropped on places where he was believed to be, but his whereabouts are unknown. U.S. officials say they don't know if he is dead or alive.
"The fact of the matter is, though, he is gone. Whether he is dead or alive, he is gone," Secretary of State Colin Powell told Associated Press Television News. "He is no longer in the lives of the people of Iraq."
Slowly, cities across Iraq were struggling to shed the effects of the war. After days of looting and mayhem in Baghdad, Americans armed newly recruited Iraqi police officers with handguns to help keep order. And citizens sought to pick up their normal lives.
"The market is open and products are available," said Tadamoun Abdel-Aziz as she shopped with her son for eggs, bread and vegetables in the downtown Irkheita Market. But with power only partially restored and temperatures in the 90s, some residents bought 3-foot blocks of ice.
American commandos backed by about 40 Marines staged the raid on the residence of Rihab Taha, dubbed "Dr. Germ" by U.N. weapons inspectors. Taha, a microbiologist, was in charge of Iraq's secret biological laboratory, suspected of weaponizing anthrax.
Three men emerged from the raid on her home with their hands up, and American troops removed several boxes of documents. Her whereabouts were unknown.
Administration officials cited the desire to eliminate weapons of mass destruction as one key reason for the war, although none has yet been found. "We're really just in the early stages of that" search, Brig. Gen. Vincent Brooks told reporters at a briefing in Qatar.
U.N. weapons inspectors also failed to find any banned weapons during prewar searches. Hans Blix, the chief inspector, is expected to appear before the U.N. Security Council next week to discuss a possible resumption of the effort - even though the United States has not invited the international team back into Iraq.
A Marine spokesman, Cpl. John Hoellwarth, said the terrorist training camp consisted of about 20 permanent buildings on 25 acres south of Baghdad, and was operated by the Palestine Liberation Front and the Iraqi government.
He said recruits were apparently instructed in the art of bomb-making, adding that Marines found chemicals, beakers and pipes at the site, along with questionnaires that asked recruits to state their preference in missions. Hoellwarth said many volunteered for suicide missions.
The discovery came less than a day after American officials disclosed the capture in Baghdad of Abul Abbas, a Palestinian behind the 1985 hijacking of an Italian cruise ship in which one American was killed. Other suspects were taken in a series of raids that also netted weapons such as rocket-propelled grenades, military officials said.
Together, the events buttressed the Bush administration's long-standing claims that Iraq under Saddam provided sanctuary to terrorists.
At the same time, there was reduced concern about the terrorist threat at home.
The threat level was raised to orange on March 17, days before the war began. And in lowering it, the administration said the end of heavy fighting in Iraq had diminished the threat, but cautioned that risks remain.
In Germany, seven American POWs arrived for examinations at a U.S. military hospital, the last stop on their return home. They were rescued Sunday, after three weeks in Iraqi captivity, from a house south of the city of Tikrit.
Circumstances of the reported shootings in Mosul were unclear. Several of the wounded said American troops had shot them. But a Marine sergeant denied that, saying American troops shot back after coming under fire from nearby gunmen.
Mohammed Rabih Sheet, an administrator at Jumhuriya Hospital, said three people were killed and 11 wounded, including two children.
It was the second outbreak of gunfire in as many days in Mosul, a city of 700,000 where Arabs and Kurds are highly suspicious of one another and tensions have been high since American forces rolled in a week ago.
Iraqis accused Americans of opening fire on a crowd Tuesday. Brooks said U.S. forces guarding a government compound fired only after being shot at and when some rioters in the street tried to climb over a wall.
In Washington, the Pentagon's top budget officer said the war has cost at least $20 billion and probably will consume at least that much in the next five months. Bush also signed a bill that provides $79 billion for additional war costs and domestic anti-terror efforts.