Iraqi President Saddam Hussein and his two sons were targeted in a bomb attack by US warplanes on Monday after military intelligence pinpointed their location in Baghdad, a US official said on Tuesday.

A US warplane dropped four 'bunker-busting' bombs on a building in the al-Mansour district in western Baghdad where the Iraqi leader and his sons Uday and Qusay were believed to be meeting with other members of the Iraqi leadership.

"There was intelligence which suggested that there was a gathering of Iraqi intelligence officials possibly including Saddam and both of his sons in a residential district of Baghdad," the official told Reuters.

Officials quickly called in a B-1B bomber to strike the location on Monday with four GBU-31 Joint Direct Attack Munition weapons, the 2,000-pound smart bombs known as 'bunker busters'.

There was no confirmation that Saddam or his sons were killed or wounded in the strike, the official said, but the building was completely destroyed and no one inside was likely to have survived.

"It's a hole in the ground," the official said.

A report from Baghdad said the bombs had blasted an 18-metre crater and destroyed three buildings in the locality. Rescue workers said at least two bodies had been found in the rubble.

The fate of Saddam and those of his sons has been the subject of intense speculation since they were targeted in an initial US strike in the early hours of March 20 (Iraqi time) on a residential compound on the outskirts of Baghdad.

If the Iraqi leader and his sons are confirmed killed it would hasten the end of the war, with remaining Iraqi troops expected to capitulate without their leaders.

On Tuesday, gunfire and explosions were being heard in several parts of the city, including a presidential palace seized by US troops on Monday.

US planes continued their bombing missions even as Iraqi forces began challenging their ground troops in various parts of the city.

US marines said they had captured a military airfield on the eastern outskirts of Baghdad on Tuesday, which had apparently been abandoned by retreating Iraqi forces.

The marines met no resistance as their armoured vehicles rolled up the runway at the Rashid airfield some five km from the centre of the capital, while infantrymen kicked down doors of office buildings to search for Iraqi soldiers.

"We are just securing it, making sure there are no enemy forces that might be straggling behind," US Captain Matt Watt of the 1st Marines Division's Lima Company, told Reuters at the airfield.

At a briefing at the Central Command headquarters in Qatar, US Brigadier General Vincent Brooks confirmed that the airfield was in US hands.

With inputs from PTI