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Blasts in Baghdad as US tries to win over Iraqis

BAGHDAD, July 26 (Reuters)

Explosions and gunfire rang out in Baghdad on Saturday, underlining Iraq remains a dangerous place despite U.S. hopes that the killing of Saddam Hussein's two feared sons will help end armed resistance.

U.S. troops said they had opened fire and that a U.S. patrol may have come under attack. A U.S. military spokesman had no immediate comment. The blasts and gunfire lasted several minutes.

Striving to convince fearful Iraqis that Saddam's sons are dead, U.S. officials showed journalists two bodies on Friday that Washington says are those of Uday and Qusay.

Unlike grisly, blood-spattered photographs published by U.S. forces earlier, the faces had been retouched and shaved to make them more closely resemble the brothers in life.

A U.S. official said the aim was not to deceive. But Iraqis, brought up in a culture of conspiracy theory, were divided on the identity of the resulting waxy corpses.

A burning issue is what will happen to the bodies. Muslim tradition demands they be buried quickly, but few in Iraq will want to see them become a shrine. It is possible they could be discreetly handed to clan elders in Tikrit, Saddam's home town.

Washington underlined its confidence that the notorious brothers had been killed by saying it expected to pay the full $30 million reward to the Iraqi informant whose tip-off enabled the U.S. military to find two of the top three men on its most-wanted Iraqis list.

"We would expect to pay the whole reward," a senior U.S. State Department official told reporters.

Washington had put $15 million bounties on each of their heads.

The net might be closing on Saddam himself, U.S. forces said. Acting on a tip-off, they rounded up several men near the former Iraqi president's home town of Tikrit suspected of belonging to his bodyguard unit.

"We continue to tighten the noose," said 4th Infantry Division commander Major General Ray Odierno.

Saddam, ousted by U.S.-led forces on April 9, has a $25 million price on his head.

The U.S. military hopes proof of the brothers' deaths will encourage more Iraqis to cooperate with and undermine daily guerrilla-style attacks they blame on die-hard Saddam loyalists.

But Iraqi analysts warn that other groups with no loyalty to Saddam may be involved in some of the attacks, including Islamic militants and nationalists giving vent to widespread resentment at the U.S. takeover of their oil-rich country.

The attacks have mainly occurred in mostly Sunni Muslim central Iraq where Saddam, a Sunni himself, had strongholds of support. The violence has dented efforts to get Iraq's oil industry powering a new economic start for the country.

World oil prices ended the week down nearly six percent as the killing of Uday and Qusay fuelled traders' hopes of an end to the looting and sabotage to Iraq's oil industry.

Forty-four U.S. troops have been killed by hostile fire since Bush declared major combat over on May 1.

The two bodies shown to some 15 journalists on Friday did look like Uday and Qusay, who U.S. troops said they killed at a villa in the northern Iraqi city of Mosul on Tuesday.

The bodies, almost naked and riddled with bullet and shrapnel wounds, were laid out in a tented military mortuary. A faint smell of disinfectant hung in the air.

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