U.S. and Iraqi forces fought insurgents around the country, including Babylon, south of the capital Wednesday while rebels in Sadr City negotiated an agreement to lay down their weapons.

A car bomb killed at least 10 and wounded 28 Wednesday near Anah, a town with no U.S. troop presence, according to Pentagon officials.

The car bomb was apparently meant for an Iraqi National Guard command post, but it detonated near a civilian rest stop, killing nine civilians and one Iraqi National Guardsman.

It wounded 24 other civilians and four ING members.

The attack occurred about five miles from Anah, a small town in Anbar province.

According to military intelligence reports, the vehicle carrying the explosives passed the ING command post and made a U-turn to go back when Iraqi soldiers fired on it. The car got stuck in between barriers set up for the protection of the base and exploded.

Officials believe the bomb plot was launched from Husayba, a violent Iraqi city that straddles the Syrian border.

An official told United Press International the military believed Anah was attacked because of the success the town is having running its own affairs. There are no U.S. forces stationed nearby or in the town, and it has not been occupied by the coalition in the past.

We consider Anah to be under local control. We maintain dialogue with the mayor and police chief and reinforce the police if asked to, but the city functions on its own and we have extremely limited presence there, the official said.

The Anah police have successfully fought off three attacks on their headquarters, unlike other Iraqi police in Anbar province -- in June alone five police stations were blown up by insurgent forces.

"Anah is doing very well. The city government functions, the police department is capable and performs its duties, and civic leadership works for the betterment and security of the town. There is a functioning judiciary, which is exactly why the attacks are occurring in that area.

There is no greater threat to the terrorists and criminals than a functioning Iraqi community thriving under self-governance, said the official, who added that the Anah attack reveals the nature of the resistance in Iraq -- that is, not as a nationalist movement but one of lawlessness and terror.

An attack like this is more an indicator of success than of failure. The enemy doesn't go after places where disorder already exists, the official said.

In Samarra, food, blankets, heaters and stoves were distributed in Samarra, where U.S. troops have killed more than 100 insurgents in recent days, said International Committee for the Red Cross spokesman Ahmed al-Rawi.

More than 500 families were displaced by fighting in recent weeks and are staying with friends and relatives in nearby cities, al-Rawi said. The Iraqi Red Crescent delivered medical supplies to the Samarrah general hospital, al-Rawi said.

ICRC has expressed its concern over the fate of civilians in this conflict, al-Rawi said. All injured people should have access to the hospitals.

Samarra residents waved white flags whenever they came out of their houses Wednesday to show they meant no harm to U.S. forces now in mop up operations against insurgent forces.

South of Baghdad in Babil province, 3,000 U.S. and Iraqi troops launched a major offensive overnight, uncovering a suspected training camp while rounding up more than 30 suspected insurgents. The U.S. military says insurgents have used the strategic city as a rear base for Fallujah, their stronghold in Iraq. Babylon is also the fabled cradle of civilization.

While rounding up 30 suspects during the initial sweep, the Iraqis and their American allies seized a suspected insurgent training camp and took control of the Jurf Kas Sukr Bridge, said a statement released by the U.S. military. The bridge, spanning the Euphrates southwest of Baghdad, is believed to be a favored corridor for insurgents moving into and out of key cities, including the capital hub and the current (rebel) sanctuary of Fallujah.

Fallujah was also bombed overnight by U.S. warplanes. The U.S. military continues to say that Jordanian terrorist Abu Musab Zarqawi and men loyal to him are fighting from Fallujah, home to followers of former president Saddam Hussein.

U.S. troops have not patrolled in Fallujah since April, when four U.S. contractors were killed, their bodies hung from a river spanning the Tigris River. Fighting there was ended by a deal to allow Iraq forces to patrol the city. Those forces quickly melted away to leave a city apparently run by insurgents.

The crackdown comes as the U.S. military promises to make all of Iraq open to hold scheduled parliamentary elections in January.

U.S. forces are hailing the success in Samarra as the positive test of newly trained Iraq forces. In addition, a number of foreigners were taken into custody in Samarra from Egypt and Sudan, according to Maj. Gen. John Batiste, a commander in Samarra.

Some $13.5 million has been set aside to rebuild the city, Batiste said. He didn't directly address allegations that civilians had been targeted in the fighting, although he did say that insurgents used civilians as human shields.

I don't think people need to be afraid of American forces, Batiste said. Insurgents made the decision to use people's houses to fight.

However, medical sources earlier in the week in Samarra's hospital said bodies of 23 children and 18 women were transported there, BBC reported.

In Sadr City, a suburb of Baghdad, representatives of interim Prime Minister Iyad Allawi continued Wednesday to negotiate with Mahdi Army rebels loyal to anti-U.S. cleric Moqtada Sadr. Allawi is calling on the Mahdi Army to hand over its weapons since many walked away from fighting in the southern city of Najaf with battle gear intact.

Previous negotiations in Sadr City have broken down, leading to nightly clashes in recent weeks.

(With reporting by UPI Pentagon correspondent Pamela Hess in Washington.)