Even as members of Iraq's interim Governing Council ventured into the city, military commanders on the ground said they did not expect any truce to last and were bolstered by the addition of a third US Marine battalion and a fourth consisting of members of the paramilitary Iraqi Civil Defense Corps.

"What's next for us as far as I am concerned is offensive operations," said Lieutenant Colonel Brennan Byrne, commander of the First Battalion-Fifth Marines. "So I'm ready to attack when they give me the green light."

A 35-strong Iraqi delegation, led by US-installed interim Governing Council members, entered Fallujah and held meetings to mediate an end to the bloodshed. Byrne warned it was unrealistic to expect battle-hardened insurgents to surrender.

"The fact they've been wearing belt bombs, the virulent nature with which they've been fighting, the chances of the Iraqi Governing Council and city fathers getting Joe Jihadi to surrender are pretty slim," Byrne said.

Despite the efforts to broker a peaceful solution for Fallujah, a bastion of the Iraqi resistance, marines and insurgents battled on.

Sporadic machine-gun fire and explosions echoed through the Sunni Muslim town west of Baghdad hours after the start of the ceasefire at noon, an AFP correspondent reported.

Black smoke billowed from the town and sirens wailed as AC-130 gunships and warplanes roared above on the sixth day of the battle in which more than 400 Iraqis have been killed and 1,000 wounded.

Insurgents lobbed mortar rounds at US positions Saturday night and large explosions rocked buildings.

"Since the suspension was called, the marines have sustained one marine killed and one wounded in Fallujah," the Marine Corps said in a statement, although it gave no further details and insisted they were respecting the unilateral ceasefire ordered by coalition commanders.

The marines also said they had pursued a group of up to 16 insurgents to a cave and dropped two large bombs on them, although there was no confirmation of any casualties.

Amid the pile-up of bodies in Fallujah's morgues, Byrne insisted that the Iraqis who had been killed were insurgents and not civilians. He defended the marines' tactics as precise and meant to steer clear of civilians.

Early Saturday, Brigadier General Mark Kimmitt, the US-led coalition's deputy director of operations, announced it was "prepared to implement a ceasefire with enemy elements in Fallujah commencing at noon".

"If the ceasefire holds, talks regarding the establishment of legitimate Iraqi authority will begin," he said. "These steps were taken with the expectation that enemy elements will also honor the ceasefire."

The US army retains the "right of self-defence" but was "seeking a bilateral ceasefire across the battlefield" to allow mediation efforts, Kimmitt told a Baghdad news conference.

In Fallujah, Master Sergeant Martin Payotelis, with an M-16 slung over his shoulder, expressed scepticism about prospects for a halt in hostilities, stressing that any deal would likely favour the insurgents.

"I don't think a ceasefire is possible. There are too many of the foreigners who have come here to fight," he said as the marines geared for the possibility of house-to-house fighting.

"It's going to get nasty," Payotelis said.

The marines also charged that their foes had failed to respect their humanitarian gestures and targeted relief convoys allowed to enter the town.

During this suspension period, coalition forces retain the inherent right to self-defense, and will remain fully prepared to resume offensive operations," the marine statement said.

The US offer of a ceasefire came after its hand-picked 25-member interim Governing Council issued a statement Saturday denouncing the Fallujah operation as "collective punishment of innocent civilians" as well as the insurgents.

WAR.WIRE