The attacks came as a US panel termed Iraq situation 'grave' and recommended a new and enhanced diplomacy so the US can "begin to move its combat forces" out of the country responsibly.

"The situation in Iraq is grave and deteriorating," the commission warned after an eight-month review of a conflict that has killed more than 2,800 U.S. troops and grown increasingly unpopular at home. The report was obtained by The Associated Press.

Receiving it at the White House, President Bush pledged to act in "a timely fashion," saying the report gives a "tough assessment" of conditions in Iraq.

The commission's report warned that the situation is "grave and dangerous" after more than three years of war and said there are no easy options for Bush, an official familiar with the panel's work said.

However, 10 people were killed and 54 others wounded when a series of mortar bombs hit a market in central Baghdad's Al-Midan area, a security official said.

Four people were killed in a suicide bombing on a bus in Baghdad's Shiite district of Sadr City. The dead included two women while 12 others were wounded.

On November 23 a series of car bombings in the impoverished area killed 202 people in by far the biggest attack in Iraq since the 2003 war to topple Saddam Hussein.

In the southern city of Basra, a British patrol clashed with members of the Mahdi Army, a Shiite militia, according to witnesses and a British military spokesman.

Three Iraqi civilians were wounded in the clash, an AFP correspondent said, while one British soldier was hospitalised with a "serious injury", according to the spokesman.

In another attack four people were killed when a bomb went off in a shop near a bus station in the town of Iskandiriyah, south of Baghdad, police said.

In western Baghdad's upscale Mansur district gunmen attempted to assassinate Brigadier General Mohsen Qassim, the head of the security force of Iraq's Sunni-controlled ministry of higher education, but only killed his driver.

Yesterday, Iraq's higher education minister Abed Dhiab al-Ujaili met the families of people kidnapped last month from his ministry's research building and said that at least 56 of the hostages are still missing.

"The fate of 56 of their sons is still unknown. The families appealed to the government to investigate their fate. The ministry has not stopped working to secure their release," a ministry statement quoted Ujaili as saying.

One police officer was also killed and two other policemen wounded when gunnen shot at their patrol in Hawija, west of the northern oil city of Kirkuk, police said.

The US military also announced that Insurgents killed a US soldier in Baghdad during combat operations on Sunday, bringing the military's losses in Iraq since the 2003 invasion to 2,902 according to an AFP count based on Pentagon figures.