Military

DATE=8/9/04

TYPE=CORRESPONDENT REPORT

TITLE=CQ IRAQ WRAP (L-O)

NUMBER=2-318133

BYLINE=LAURIE KASSMAN

DATELINE=WASHINGTON

///EDS: REISSUED. DELETES SECOND SENTENCE IN GRAF. AFTER BUSH ACT. AUDIO MUST CONFORM. ///

HEADLINE: U.S. Forces Battle Iraqi Fighters Loyal to Radical Cleric for Fifth Day.

INTRO: For the fifth day, U.S. forces battled militia loyal to radical Shi'ite cleric Moqtada al-Sadr in the holy city of Najaf. Politician Ahmad Chalabi and his nephew vow to fight charges brought against them in an Iraqi court. A car bombing in the northern city of Baquba kills seven Iraqi police officers. Correspondent Laurie Kassman wraps up the day's developments.

TEXT: ///GUNFIRE AND FADE ///

U.S. and Iraqi forces are battling fighters loyal to Moqtada al-Sadr for control of Najaf. The U.S. military has accused the rebels of hiding in the holy Imam Ali shrine and using the city's cemetery to store their weapons.

The radical Shi'ite cleric has vowed to remain in the holy Shi'ite city, in his words, until my last drop of blood.

His militia, known as the Mehdi Army, has defied an ultimatum issued late last week to leave the city. There was a brief truce Monday so casualties could be evacuated.

Iraq also has stopped pumping oil from its southern oil fields near Basra after al-Sadr militants threatened to target the facilities.

Iraq's government has vowed to stop the insurgency. In Washington, President Bush says U.S. and Iraqi forces appear to be making progress toward that goal.

///BUSH ACT ///

"Our policy is to work with Prime Minister Allawi and support the Iraqis as they move toward elections. Our troops were engaged with al-Sadr militia and so were the Iraqis. And, it appears that we're making pretty good progress about stabilizing Najaf."

/// END ACT ///

Mr. Bush made the remarks during a meeting with Polish Prime Minister Marek Belka. The two men have discussed Warsaw's role in the U.S.-led coalition in Iraq.

In other news, Iraqi politician Ahmad Chalabi says he will fight the counterfeiting charges brought against him by an Iraqi judge. Mr. Chalabi is on a business trip to Iran.

/// CHALABI ACT ///

"I will return to Iraq to face those lies. "

/// END ACT ///

So will his nephew Salem Chalabi, who is considered a suspect in the murder of the Director General of the Ministry of Finance.

Salem Chalabi heads the special tribunal that has been set up to try Saddam Hussein for crimes against humanity. Currently on a visit to Britain, Mr. Chalabi accuses the judge of political motives.

/// Salem CHALABI ACT ///

"The judge has appeared in print criticizing the tribunal, criticizing me personally. As an investigative judge, he should be impartial, rather than partial against somebody."

/// END ACT ///

Judge Zuhair al-Maliky insists it is a purely judicial matter with no political motivation. (Signed)

NEB/LMK/KBK/RH