Fallujah residents, meanwhile, protested against Saturday's air strike, claiming innocent civilians died in the raid and not followers of suspected Al-Qaeda operative Abu Mussab al-Zarqawi.

"That location was occupied by members of the Zarqawi terror network," said Brigadier General Mark Kimmitt, the coalition's deputy director of operations.

"What we saw at the site location and in all our post strike intelligence is that was a safehouse.

"These were key personnel in the Zarqawi network operating inside Fallujah, with the capability to strike Iraqis and coalition forces throughout Iraq," he told a news conference.

The general claimed the house stored materials for car bombs and other explosives, but he did not know the nationalities of the people inside and around the destroyed building.

"We have no confirmation what nations they came from," Kimmitt told reporters.

In Fallujah, hundreds gathered in the city's main square Monday in outrage over the deadly strike.

"The lie about Zarqawi is like the one about weapons of mass destruction and Fallujah rejects these allegations," a banner read, signed by Shiite dignitaries.

The reference was to the main US justification for the war on Iraq that Saddam Hussein possessed chemical and biological weapons. Until now, more than a year after the former Iraqi president's regime was ousted, those weapons have not been found.

Iraqi police said Sunday that three children were among 26 civilians killed in the US raid, adding that there was no trace of the Islamic militants whom US commanders say were targeted.

"We have not found any trace of an armed group there," Captain Mohammed Abdul Karim told AFP after the strike on the Jbail neighborhood.

Zarqawi, a Jordanian fugitive with a 10-million-dollar price on his head, has been accused by coalition and Iraqi officials of being behind numerous atrocities, including Thursday's suicide bomb in Baghdad that killed 35 people.

Local residents in the city of 300,000, 50 kilometres (30 miles) west of Baghdad, which has a reputation for closing ranks, also denied all knowledge of Zarqawi's group.

Zarqawi heads his own militant faction named Tawhid wa al-Jihad (Unification and Holy War) which claimed the kidnapping of a South Korean national in a videotaped message aired Sunday on the Arabic news channel Al-Jazeera.

The group is threatening to behead the 33-year-old translator, Kim Sun-Il.

WAR.WIRE