BAGHDAD, 23 September 2004 — Over three dozen Iraqis were killed and more than 200 wounded in fresh violence across Baghdad yesterday, as hopes were fading for a British hostage whose two US colleagues were savagely beheaded by their captors.

The US Army launched a fresh offensive on Baghdad’s radical Shiite stronghold of Sadr City overnight that killed 13 people, said Iraqi medics, lowering an earlier death toll.

And a suicide car bomb targeting recruits for the Iraqi National Guard ripped through a busy shopping area in central Baghdad, killing seven people.

In northern Iraq, a US soldier was killed in an attack on a patrol in the city of Mosul, while another American soldier died in a roadside bomb attack in Tikrit, the hometown of ousted President Saddam Hussein, the US military said.

Time was running out for Kenneth Bigley, a British engineer kidnapped by militants from an Al-Qaeda-linked group headed by Abu Mussab Al-Zarqawi, whose two US colleagues had their heads hacked off over the past two days.

The group’s spiritual leader, Sheikh Abu Anas Al-Shami, was killed in a US airstrike on his car last week in a Baghdad suburb, the man’s father and clerics said.

Bigley’s chances of escape appeared slim after the US Embassy and the Iraqi government denied that the release of an Iraqi women held by the coalition was imminent.

Zarqawi’s group had demanded the coalition free all the women it detains.

The Iraqi Justice Ministry said one of the two women in US custody in Iraq, Rihab Taha, could be freed later in the day.

But the US Embassy said later that Taha and Huda Ammash, dubbed “Dr. Germ” and “Mrs. Anthrax” respectively by US forces, would not be released soon. “The two women are in legal and physical custody of the multinational forces in Iraq and neither will be released imminently,” a spokesman said.

On Monday night, Tawhid wal Jihad issued a video showing in graphic detail the decapitation of US hostage Eugene Armstrong and extended by one day its ultimatum to Washington and London over the prisoners.

His colleague Jack Hensley was beheaded on Tuesday night after neither of two main powers behind last year’s invasion of Iraq showed any sign of yielding to the kidnappers’ demands.

Hensley’s family and the US Embassy confirmed that his body had been handed over in Baghdad and would be sent back to the United States soon. Washington already said on Monday that a body found that day in western Baghdad was that of Armstrong.

“We condemn in the strongest possible terms this despicable act of terrorism,” said State Department spokeswoman Darla Jordan. “This is a terrible tragedy that illustrates the ruthless nature of those who committed this crime.”

In Italy, press reports said the Italian secret service had made indirect contact with the kidnappers of two female aid workers captured in Iraq two weeks ago and believed the hostages were still alive.

“A channel has been opened in Iraq and has provided information about the fate of the two young women,” Simona Pari and Simona Torretta, according to Italy’s leading daily, Corriere della Sera.

The US push during which 13 people were killed and 149 wounded in the Shiite bastion of Sadr City in Baghdad was described by an official from firebrand cleric Moqtada Sadr’s office as the “most devastating” offensive there since Saddam’s fall.

US military officials claimed they had killed up to 25 fighters from Sadr’s Mehdi Army and that the raid was aimed at stabilizing the area and allowing reconstruction work to begin in earnest.

The Baghdad car bomb which ripped through men queuing up to join the Iraqi National Guard was the latest in a long list of attacks against Iraqi security forces and a recent surge of attacks in the capital.

An AFP reporter saw people burying body parts on the median strip which cuts the wide boulevard in two, just a short distance from the site of a thwarted car bomb attack on Tuesday.

Hours later, another car bomb attack apparently aimed at a US military patrol shook the capital’s upmarket Mansur neighborhood, witnesses told AFP. There was no immediate report of casualties.

Fresh fighting also erupted in the city’s Sunni stronghold of Haifa Street, which is a mixture of smart high-rises and impoverished alleyways harboring a loose alliance of Saddam loyalists and insurgents.

Officials in Brussels, meanwhile, said NATO was close to finally agreeing to launch a full-blown training mission for Iraqi security forces yesterday, after hammering out differences notably due to French resistance.

It emerged last week that France and Belgium among others were unhappy with details of the expansion plans, notably how the mission would be funded and protected, and the extent of the officer training involved.

Additional input from agencies