Dull explosions from the edge of the city continued during the morning after a night of heavy bombardment on its southern and southeastern fringes, where elite Iraqi divisions are said to be dug in.

Warplanes could be seen at high altitude but Iraq's anti-aircrarft gunners remained silent.

More and more trenches filled with oil have been set ablaze around Baghdad in an effort to hamper the visibility of coalition pilots, giving off thick black clouds and rendering the air noxious.

As the United States said its forces were within sight of the capital, state television broadcast a series of statements by President Saddam Hussein.

He stressed barely a third of his forces had been engaged in battle and warned Kurds advancing in the north not to betray him, threatening future reprisals.

"Many thousands of soldiers are defending the homeland ... and they will not allow them (coalition forces) to go into Baghdad without defeating and repelling them," Saddam said.

US officers said 500 Iraqi troops were killed in clashes with US forces for a key bridge some 30 kilometers (20 miles) southwest of Baghdad.

However US Central Command announced that an F/A 18 Hornet fighter had been shot down over Iraq on Wednesday. A US Army Blackhawk helicopter was also shot down.

But Iraq rejected US claims to have devastated two elite divisions of the Republican Guard on Wednesday, another day of heavy air strikes, including on Saddam's main palace.

The US-led coalition had launched at least two atacks on the Republican Palace, the third straight day the sprawling complex on the Tigris river was bombed.

US Central Command said coalition forces targeted the presidential bunker and residence along with the New Presidential Palace in the Al-Khark section west of the Tigris.

Warplanes also struck a farm used as a command and control post southwest of Baghdad and a military store in the Iraqi capital, Centcom said.

US and British warplanes have been pounding positions around the capital for days hoping to weaken Iraq's most elite units, particularly the 60,000-strong Republican Guard.

The Pentagon said it no longer considered the Guard's Medina and Baghdad divisions to be "credible forces".

At the US Central Command forward base in Qatar, Brigadier General Vincent Brooks announced that the Baghdad division "has been destroyed".

"We will approach Baghdad. The dagger is clearly pointed at the heart of the regime and will remain pointed at it until the regime is gone," Brooks said.

But Iraq has repeatedly warned that the decisive battle would be in Baghdad, where it intends to engage US-led forces in bloody street-to-street fighting.

An Iraqi military spokesman said the claimed destruction of the Baghdad division had "no foundation".

"On the contrary, the Baghdad division maintains its cohesion and has a morale of steel. It has not suffered any losses and is ready to confront the enemy and destroy it," the spokesman told AFP.

The division's commander was quoted on state television saying 17 soldiers had been killed and 35 wounded.

"The command is intact and we are ready to confront the enemy wherever he may be," said the general, whose name was not given.

Iraq said 10 more people died and nearly 90 were injured Tuesday. Bombing also levelled a Red Crescent maternity clinic Wednesday, killing at least one person and wounding a dozen others, witnesses said.

Dozens of other deaths were reported Tuesday around Hilla south of Baghdad, with grisly images broadcast repeatedly to an Arab world already deeply hostile to the war.

As air strikes resumed just before midnight (2100 GMT) Wednesday, Iraqi state television went black. But programming resumed half an hour later.

The television has been regularly targeted in air strikes by the United States, which believes its repeated broadcasts of a confident regime crushing the invaders are key to maintaining Saddam's grip on power.

Just hours before the television went out, it showed footage of a smiling and relaxed Saddam in military attire chairing a meeting.

It was the first footage of the Iraqi leader broadcast in three days.

Saddam's non-appearance during an address Tuesday calling for holy war, which was read on television, had raised new speculation in Washington and London about whether he had survived the thousands of missiles and bombs aimed at the most sensitive points of his rule.

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