A suicide bomber wearing a vest packed with explosives killed 13 neighbourhood patrol volunteers and a US soldier in a volatile Iraqi province.
US officials say attacks in Iraq are down by 60 per cent since June, but have also warned that violence could return if Iraqi political leaders do not make more progress on reconciling warring sects and ethnic groups.
President George W Bush said he was dissatisfied with progress but defended Iraq's political process, saying despite a deadlock on laws in the Baghdad parliament, communities were moving towards reconciliation at the provincial level.
“There is a functioning government,” he said in Washington.
“They are distributing oil revenues to the provinces.”
“There's local reconciliation taking place, and a lot of times it is local progress that will drive national politics.
Are we satisfied with the progress in Baghdad? No. But to say nothing's happening, that is just simply not the case.”
After the bombing in Kanaan, near the Diyala province capital Baquba north of Baghdad, a Reuters photographer saw the bodies of 13 males in civilian clothes brought to a morgue.
One woman wailed next to the body of her husband: “Who will raise your son?”
US forces said the suicide bomber struck a foot patrol near a building where a city council meeting was to be held, killing one soldier and wounding 10. Iraqi police said the building was also being used to recruit volunteers for neighbourhood patrols, 13 of whom were killed and 10 wounded.
US forces are paying mostly Sunni Arab men to join neighbourhood patrols to fight Sunni al Qaeda militants, a tactic Washington says has helped curb violence.
But the patrols have been increasingly targeted, especially in provinces like Diyala where US commanders say al Qaeda has regrouped after being pushed out of other parts of Iraq.
US commanders said they had found a torture chamber in Diyala province with chains on the walls and a battery connected to an iron bed and said it was proof of al Qaeda activity.
In another attack, a car bomb parked outside a liquor store in central Baghdad killed three people and wounded 20.
One of the other main factors US commanders credit for the decline in violence is a ceasefire by followers of the Shi'ite Muslim cleric Moqtada al-Sadr. In a development welcomed by US forces, Sadr's spokesman said the cleric was considering extending the six-month truce after it expires in February.
Sadr led uprisings against US troops in 2004 and his militia was later described by US commanders as their greatest threat. He surprised Iraqis and US forces when he ordered a six-month truce in August.
“Yes, there is a chance that the freeze on the Mehdi Army will be extended,” spokesman Salah al-Ubaidy told Reuters late on Wednesday in Najaf, the holy Shi'ite city.
US spokesman Rear Admiral Greg Smith said: “Absolutely, we welcome the potential for the extension of the freeze…
(Sadr's) pledge to work in a political process and the peaceful transition is much more constructive than through violence.”
The son of a revered Shi'ite cleric slain under Saddam Hussein, Sadr has wide influence in the Shi'ite south and parts of Baghdad although he does not himself hold high clerical rank.
His movement says he has recently begun advanced Islamic studies in a bid to climb the ranks of the religious hierarchy.
Washington has urged Iraq's Shi'ite-led government to take advantage of the lull in violence to enact stalled legislative measures aimed at reconciling warring sects.
Vice President Tareq al-Hashemi, a Sunni Arab, complained the government had failed to free detainees in time for the Eid religious holiday, an important demand of Sunnis who make up most of the 50,000 prisoners held by Iraqi and US forces.