The US-led coalition that administers Iraq also warned its members to be on heightened alert against attacks over the holiday season, as Christians in Baghdad celebrated Christmas Eve mass amid security fears.

"Coalition members are cautioned to be especially alert over the next 10 days and to take appropriate steps to increase their security awareness," said a notice from the Coalition Provisional Authority (CPA) Regional Security Coordinator.

"We are seeing continuing indications following the capture of Saddam Hussein that elements are planning actions against CPA and Iraqi interests in order to demonstrate that they are still a significant force," the notice said.

Late Wednesday, explosions sounded across Baghdad for a second night. AFP correspondents heard several explosions in the distance about 10:15 pm (1915 GMT), less intense than those which thumped like artillery rounds in the capital a night earlier.

And a loud explosion also rocked central Baghdad near the Sheraton hotel Wednesday, but a US military spokeswoman said it was not clear if it was part of the Iron Grip operation which has used heavy artillery and aircraft fire.

"We have investigators checking out the explosion," she said.

Faint flames could be seen rising into the sky in the area Wednesday night and helicopters circled overhead.

The US military said it was sweeping for insurgents to make the most of vital intelligence obtained from former dictator Saddam Hussein, who was captured on December 13 north of Baghdad.

The Arab League meanwhile was entreated to play a key role in rebuilding war-torn Iraq Wednesday, by Governing Council member Iyad Alawi.