US forces, acting on information that Saddam may be hiding in the district, are deployed en force there and helicopters are hovering overhead, the residents told AFP's correspondent in this Kurdish city southeast of Mosul.

"There is a heavy presence of US troops, acting on information that Saddam may be hiding in the al-Arabi neighborhood," one resident said.

US forces killed Saddam's sons Uday and Qusay in a raid on a villa in Mosul on July 22.

Earlier report says the United Nations may further scale down its already reduced operations in Iraq in the wake of an attack in the holy city of Najaf that killed 83 people, it said Saturday.

"We are considering a serious reduction in the number of UN staff because we have missions to accomplish here and the difficulties we face do not permit us to do that properly," said UN spokeswoman in Iraq, Veronique Taveau.

But she would not say how many staff might be pulled out and insisted that no decision had yet been made.

The world body evacuated many of its staff after an August 19 truck bombing outside its Baghdad headquarters that killed 22 people, including its special envoy to Iraq, Sergio Vieira de Mello, and wounded more than 100.

The United Nations now has about 400 Iraqis and some 150 expatriates remaining, according to Taveau.

Any further reductions would come from its offices in Baghdad, in the cities of Mosul and Arbil in the north, Basra in the south and Hilla in central Iraq. On Friday, a bomb attack outside one of Shiite Islam's holiest shrines in Najaf killed 83 people, including a top Muslim cleric.

Meanwhile, Russian President Vladimir Putin said on Saturday Moscow would not oppose the establishment of an international force in Iraq under US command so long as it was authorised by the United Nations Security Council.