BAQUBA, Oct 24: Rebels killed 49 unarmed army recruits in one of the bloodiest attacks on Iraq's nascent security forces and, in a separate attack on Sunday, killed a US diplomat in a mortar strike near Baghdad airport.

The bodies of 37 recruits shot dead on a road northeast of Baghdad were found on Saturday and 12 were discovered on Sunday.

"They were all executed, we found them executed," Interior Ministry spokesman Adnan Abdul-Rahman said.

The attack was another blow to the efforts of the interim government to rebuild Iraqi security forces to tackle a raging insurgency that US-led forces have failed to quell.

"We found them arranged in groups of 12 with bullets in the head," Iraqi National Guard officer Jassim Saadi told Reuters television in the town of Mandali, near the Iranian border, where the bodies were brought after the ambush.

The bodies, in torn and bloodstained civilian clothes, were taken in the back of trucks to a National Guard base in Mandali, where they were laid out in rows.

The recruits, based at Kirkush, 90km northeast of Baghdad, had been heading for home leave in three minibuses when they were ambushed at about 8pm on Saturday.

Police said insurgents disguised as police had set up a checkpoint and stopped the buses. They forced them to leave the buses and lie face down on the tarmac before shooting them.

Villagers heard the gunfire, found the bodies and called police. A dozen recruits who tried to flee were also shot. Their bodies were found on Sunday. The minibuses were burned.

A senior security official said most of the soldiers had been from poor families in the mainly Shia cities of Basra, Amara and Nassiriya in southern Iraq.

"It appears that they were ambushed by a large, well-organized force with good intelligence," the source said.

Insurgents have frequently targeted Iraqis seen as cooperating with the US military or the interim government.

The headless body of an unidentified man in a business suit was found on Sunday with feet tied, floating in the Tigris River near the northern city of Kirkuk, police said.

The body was the fourth to be recovered from the area in the past two months. The other three appeared to have been Iraqis working with US forces, police said.

Meanwhile, a website on Sunday published a statement attributed to the extremist group led by Abu Mussab al-Zarqawi which claimed it carried out the massacre of Iraqi cadets close to Baquba.

US DIPLOMAT: A US embassy spokesman said a diplomatic security officer had been killed by "indirect fire" on Sunday at Camp Victory, a sprawling US military headquarters near the airport which comes under frequent rebel attack.