Fresh violence rocked Iraq with five civilians  killed in clashes between US troops and Shiite militiamen and a mortar round  exploding Tuesday inside Shiite Islam's holiest shrine, after President George  W. Bush outlined his plans for a return to self-rule.

The mortar exploded inside Imam Ali shrine in the central city of Najaf,  wounding 10 people, an AFP correspondent at the scene and the office of  radical Shiite cleric Moqtada Sadr said, in fighting that spread from nearby  Kufa.

The upper part of one of the main gold-covered gates leading to the imam's  tomb was damaged and rubble strewn on the shrine's blood-stained floor. Sadr's office blamed the attack on US troops.

In a major policy speech on Monday, Bush warned that "there are difficult  days ahead and the way forward may sometimes appear chaotic." But he vowed the  handover of sovereignty would take place at the end of June as planned. 

He also called for Baghdad's notorious Abu Ghraib jail to be razed in a bid  to cap a prison abuse scandal. 

Medics said five people were killed and 18 wounded in the city of Kufa in  overnight clashes between US soldiers and Sadr's Mehdi Army militiamen, who launched an anti-occupation uprising more than a month ago. 

Coalition officials have made it clear they are determined to wipe out the  Mahdi Army and bring the popular leader to justice over his alleged role in  the murder of a rival cleric last year.

In Baghdad, one day after two Britons were killed in the capital, a car bomb exploded outside a hotel close to Australia's diplomatic mission,   wounding three people including a child, police and security officers said.

Three people were wounded when a car blew up outside the Kurma hotel, two  of them hotel guests and the other a little girl passing nearby, said interior  ministry spokesman Colonel Adnan Abdel Rahman.  The blast left a huge hole in the ground and shattered glass at the hotel  and nearby homes. Two cars were completely destroyed.

"I can tell you there was an explosion. It was very loud, but it would be  inaccurate to say there was a bomb outside the Australian embassy or where the  Australians live," Neil Muels, head of the Canberra mission, told AFP. He said none of the nine-member Australian team had been hurt in the blast. 

Separately, the US military announced that one soldier was killed and four  others wounded in a rocket attack on a coalition base northwest of Baghdad,  around 2:20 pm (1020 GMT) Monday.

The army has reported seven soldiers killed in the past seven days,  bringing the US military death toll in Iraq to 797 since the start of the  US-led invasion in March 2003, including 581 troops killed in action.

Setting out his strategy for the power transfer and beyond in a  Pennsylvania speech, Bush revealed the US plan to tear down the prison near Baghdad where US soldiers humiliated Iraqi detainees.

He said the prison was "a symbol of disgraceful conduct by a few American troops who dishonored our country and disregarded our values," vowing that  Washington will pay for a new maximum security facility. 

"When that prison is completed, detainees at Abu Ghraib will be relocated. Then, with the approval of the Iraqi government, we will demolish the Abu  Ghraib prison as a fitting symbol of Iraq's new beginning."

Seven soldiers have been charged for abusing and humilitating detainees, as  a flood of photos and video clips have drawn international condemnation. One  of the soldiers has been jailed for a year, in a first court martial. 

A senior US defence official has strongly denied that the upcoming  replacement of Lieutenant General Ricardo Sanchez, the top US commander in  Iraq, was linked to the Abu Ghraib scandal.

Meanwhile, just over five weeks before the scheduled handover, the United  States and Britain submitted a draft UN resolution which promises to hand over  full sovereignty to an interim Iraqi government on June 30. 

The UN special envoy to Iraq, Lakhdar Brahimi, will present the names this  week of members of the proposed interim Iraqi government; made up of a president, two vice presidents, a prime minister and 26 ministers, Bush said. 

No date has been set for a vote on the US-British resolution at the United  Nations and diplomats said that many questions remained over the proposed  draft. The resolution sets no date for US and British forces to leave Iraq and  gives them wide-ranging powers to maintain order and fight "terrorism". 
AFP