BAGHDAD, Nov 14 (Reuters) - Three U.S. soldiers were killed in two separate incidents in northern Iraq, the U.S. military said on Wednesday, and Iraqi leaders warned that sectarian strife remained a great threat despite improving security.
In central Baghdad, a roadside bomb killed two civilians and wounded three just outside the heavily fortified Green Zone that houses the U.S. embassy and government ministries, police said.
The explosion, which shook buildings in the Green Zone, was close to a heavily guarded checkpoint where hundreds of Iraqis who work inside the sprawling complex queue every morning.
It was one of the loudest blasts heard in the capital in weeks after a lull in attacks that had become almost a daily occurrence earlier this year.
U.S. military spokesman Rear Admiral Gregory Smith said the blast, targeting a convoy of military vehicles, caused "multiple military and civilian casualties" but gave no further details.
Hours later Iraqi leaders gathered at a reconstruction conference in the Green Zone, not far from the blast site, and warned that money alone would not solve Iraq's problems.
Vice President Tareq al-Hashemi, a Sunni Arab, said Iraq had not just suffered material destruction in a sectarian conflict that had tipped the nation to the brink of sectarian civil war.
"The greatest destruction was the social fabric," Hashemi told the conference. "This will remain the principal obstacle to security and stability."
Wednesday's blast and the deaths of three U.S. soldiers in what is already the deadliest year of the conflict for the U.S. military were reminders that Iraq's problems were far from over.
A bomb blast killed two and wounded four in Diyala province northeast of Baghdad on Tuesday, the military said. Another U.S. soldier was shot and killed near northern Mosul.
Their deaths took the total of U.S. soldiers killed in Iraq to 3,863, according to the independent Web site icasualties.org, which tracks military and civilian casualties in Iraq.
"We need to remind ourselves that this fight is not over," U.S. Ambassador Ryan Crocker told the reconstruction conference.
"There is still a determined enemy, terrorists, extremist militias that will take any opportunity they can find to get control back of the streets of Baghdad," he said.
An extra 30,000 U.S. troops, improving Iraqi security forces and the growing use of neighbourhood police units have been credited for sharp drops in U.S. military and Iraqi civilian casualties in the previous two months.
However, 860 U.S. troops have been killed so far this year, the worst annual total since the U.S.-led invasion to topple Saddam, 11 higher than the previous worst yearly total in 2004.
U.S. President George W. Bush sent the extra troops to Iraq in a last-ditch bid to stop Iraq from spiralling into sectarian civil war between majority Shi'ite and minority Sunni Arabs.
The offensive began in mid-February, when Iraq was gripped by multiple bombings and shooting attacks almost every day.
Attacks in Baghdad and elsewhere have gradually declined since the "surge" troops became fully operational in mid-June.
However, ethnically mixed Mosul, Iraq's third-largest city, and Diyala province remain troublespots after al Qaeda in Iraq, blamed for most big car bomb attacks, were squeezed out of western Anbar province and Baghdad.
The U.S. military said on Tuesday that 3,000 troops were being sent home from Diyala, part of Bush's plan to cut troop levels in Iraq.
While the overall number of troops in Iraq would drop from its current level of about 162,000, the number in Diyala would remain the same, with the 3,000 leaving to be replaced by another brigade already in Iraq, the military said.
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