FALLUJAH, Sept 6: Seven US marines and three Iraqi national guards were killed on Monday in the deadliest anti-coalition attack in months, as Iraqi officials sheepishly retracted claims Saddam's deputy had been captured.

Meanwhile five hostages, a Turkish truck driver, four Jordanians and a Sudanese national, were released by their kidnappers, but an Islamist group reportedly set new conditions for the release of two French journalists.

The US Marines said a car bomb blew up by a joint US-Iraqi military convoy near the Sunni Muslim insurgent stronghold of Fallujah, west of Baghdad. "The explosion killed seven marines who were assigned to the First Marine Expeditionary Force and three Iraqi National Guard Soldiers," it said.

Four Iraqi civilians were also wounded in an ensuing gunbattle, witnesses said, while another three US troops were injured when a roadside bomb exploded in eastern Baghdad.

The deaths from the bloodiest single attack against US troops in months came amid fresh efforts by the Iraqi government to crack down on insurgents that are gradually securing enclaves across the country.

But Iraq's fledgling security apparatus scored a resounding own-goal when it boasted national guards had captured the most wanted member of the former regime, Izzat Ibrahim al-Duri, only to perform a spectacular about-face a day later.

After trumpeting the arrest of Saddam's reviled henchman on Sunday, the government was forced to admit the 62-year-old Ibrahim was still at large. "Today, I am happy to say there was a person arrested. But after making appropriate checks, it was not Izzat Ibrahim al-Duri. It was one of his relatives.

He is also wanted but he is not on any major lists," said interior ministry spokesman Sabah Kadhim. Doubts over the initial claim first emerged on Sunday. -AFP