Also today, U.S. soldiers fired warning shots over the heads of stone-throwing Shiite Muslims outside a mosque in Baghdad. The Shiites were angry over the brief detention of their preacher, who they said was questioned about allegedly inflammatory sermons.

The Shiites warned if they did not receive a written apology from the Americans and Iraqi police within three days, they would turn against the U.S. occupation.

Gunfire rattled through the streets of downtown Baghdad early today after about 1,000 protesters stormed a police station near the Palestine Hotel, where many western journalists are based, to demand jobs with the Iraqi police force. Many said they paid bribes to have their names added to the recruit list but had not been hired.

After protesters set fire to two cars, police opened fire, sending demonstrators, motorists and pedestrians scurrying for cover. At least one policeman was seen firing his pistol into the crowd. Witnesses said two people were injured. Police Cpl. Hashim Habib Mohsen said some of the demonstrators fired on police.

Lt. Mothana Ali said police told the crowd they were not hiring new officers, but provocateurs incited them to storm the building. The chief of the east Baghdad police, Brig. Khadum Abide, arrived to talk with the demonstrators and told them appointments to the force would be announced in three days.

"All these policemen are corrupt," protester Ali Hamid, 21, complained. "We gave them money to register our names as candidates and when we returned, they said we have no business being here. They are all corrupt, from officers to regular policemen."

Ali Aboud, a 52-year-old unemployed builder, said police asked him to pay the equivalent of $135 Cdn for a job.

"They promised us they would give us jobs in July. We have come every week, but still we get no answer," Aboud said.

Yassin Khudier said he paid $135 to the driver of the chief of the Facilities Protection Force, which guards public buildings, for a job, but "I was deceived by this person and I want my money back."

In the northern city of Mosul, police also fired warning shots in the air to disperse hundreds of jobless Iraqis who marched to an employment office and City Hall to demand jobs. The protesters also said they had been forced to pay bribes for jobs which never materialized.

"Saddam Hussein is better than the Americans," said Ahmed Mohammed, 18. "Americans offer no jobs. There's no democracy or security in Mosul. Why aren't there jobs? Some people pay money or have connections."

In Baghdad, Samir Shakir Mahmoud, a member of the U.S.-appointed Iraqi Governing Council, admitted there were problems with the new police force, but said Iraqi officials "are doing our best" to improve the situation. Despite allegations of corruption, Mahmoud said "security in Iraq can best be performed by Iraqis themselves" and "the faster we can do that, the better."

Apart from crime, corruption, crumbling infrastructure and a shattered economy, the U.S.-led coalition faces daily attacks by Iraqis opposed to the American presence.

Today, a roadside bomb exploded about 300 metres from the main U.S. base in Saddam's hometown, Tikrit, killing an American soldier and injuring two others, U.S. officials said.

Later, another American soldier was shot and killed while on patrol in the al-Mansour district of western Baghdad, the U.S. command said.

Their deaths brought to 89 the number of U.S. soldiers killed by hostile fire since President George W. Bush declared an end to major combat May 1.

Meanwhile, a Ukrainian peacekeeper was killed when a vehicle he was travelling in overturned, the Ukrainian Defence Ministry said. He was the first soldier from Ukraine to die in Iraq. Some 1,650 Ukrainian troops are serving in the Polish-led stabilization force patrolling southern Iraq.

In Samara, 100 kilometres north of Baghdad, U.S. troops found 14 weapons caches today, confiscating 60 rocket-propelled grenade launchers, as well 200 grenades, 150 mortar rounds, 60 mortar tubes and seven heavy machine-guns.

At the Ali Kazem al-Bayai mosque in southwestern Baghdad, several dozen Shiites gathered to protest the brief detention Tuesday of their preacher, Moayed al-Khazraji.

During the rally, several U.S. military vehicles arrived but were driven away in a hail of stones. A U.S. soldier fired a few warning shots in the air and several mosque security guards returned fire with handguns, but there were no injuries.

Shiites, the majority of Iraq's 25 million people, have been generally more accepting of the U.S. occupation than Sunnis, the foundation of the former regime. Many Shiites opposed Saddam because of his bloody crackdown on a Shiite uprising after Iraq's defeat in the 1991 Persian Gulf War.