As the Iraq war entered its fourth year, nearly 1,500 U.S. and Iraqi soldiers on Sunday sought to root out insurgents from farming villages an hour's drive north of the capital, and at least 35 people died in insurgent and sectarian violence nationwide.

Iraqi passer-by look at the flak jacket of an Iraqi policeman, following a roadside bomb, in Baqouba, 60 kilometers (35 miles) northeast of Baghdad, Iraq, Sunday, March 19, 2006. A roadside bomb exploded Sunday targeting a police patrol, killing three policemen and injuring ten civilians. [AP]

Iraqi politicians still had not formed a government more than three months after landmark elections for the country's first permanent post-invasion parliament, but they announced an agreement on naming a Security Council to deal with key matters while negotiations proceed.

The 133,000 American troops on the ground inside Iraq was nearly a third more than took part in the campaign to oust Saddam Hussein that began in the early hours of March 20, 2003.

At least 2,314 U.S. military personnel have died in the war, which is estimated to have cost $200 billion to $250 billion so far. President Bush says about 30,000 Iraqis have been killed, while others put the toll far higher.

Returning to the White House after a weekend at the presidential retreat in Camp David, Md., Bush offered an upbeat assessment.

"We are implementing a strategy that will lead to victory in Iraq. And a victory in Iraq will make this country more secure and will help lay the foundation of peace for generations to come," he said.

Many politicians both inside and outside Iraq said the continuing violence could only be described as a civil war.

"It is unfortunate that we are in civil war. We are losing each day as an average 50 to 60 people throughout the country, if not more," former interim Prime Minister Ayad Allawi told British Broadcasting Corp. "If this is not civil war, then God knows what civil war is."

The Bush administration and U.S. military leaders disagreed.

"Personally don't believe, one, that we're there now; two, that civil war is imminent; and, three, that it is inevitable that it will happen," Gen. George Casey, the U.S. commander in Iraq, said in an interview with Fox television.

In a sign of political progress, Iraq's top politicians emerged from the fourth in a series of U.S.-brokered all-party meetings on forming a new government and reported they had established an advisory, 19-member Security Council.

The council, to be headed by President Jalal Talabani, was established as an interim measure as politicians struggle to agree on the makeup of a new government following the Dec. 15 parliamentary elections.

"It was a successful meeting, and we have agreed on forming a National Security Council whose powers will not contradict the constitution," Adnan al-Dulaimi, a Sunni Arab political leader, told The Associated Press.

Al-Dulaimi said nine council seats would go to Iraq's Shiite Muslim majority, while Kurds and Sunni Arabs each would control four seats and the secular bloc two. Talabani, a Kurd, would head the group.

The exact powers of the council, if any, were not explained. But it appeared to have been formed to ensure that politicians from minority blocs would at least be consulted in advance on important government and security decisions.

The political discussions on forming a government began last week under pressure from U.S. Ambassador Zalmay Khalilzad. Al-Dulaimi said the talks would not resume until Saturday because of Shiite and Kurdish holidays this week.

Khalilzad has urged patience for the prolonged political negotiations. "I think it will take a few more weeks," he said Friday.

The speedy formation of a government has become a top U.S. priority on the theory that a unified leadership with representatives from all major factions would quell violence and open the way for American hopes to begin withdrawing troops this summer.

As politicians met in Baghdad, Iraqi police said eight civilians, including a child, were killed during clashes between U.S. troops and gunmen in Duluiyah, 45 miles north of Baghdad. The U.S. military said it was checking the report.

The town is in Iraq's Sunni Arab heartland where the Iraqi army and U.S. forces opened a major airborne campaign last week to hunt insurgents. The American military called it the largest "air assault" operation since the invasion.

Casey, the U.S. commander, said the significance of the operation may have been overblown. "I think it might have got a little bit more hype than it truly deserved," he said on CNN's "Late Edition with Wolf Blitzer."

But he disputed allegations by some U.S. politicians that the operation was ordered for political reasons.

"This operation was planned with the Iraqi security forces, as intelligence was available. ... it was an intelligence based operation and had nothing to do with politics," he said.

Evidence of nightly sectarian violence among Sunnis and Shiites showed up at two Baghdad sewage treatment plants Sunday. Police said they found 14 bodies, bound hand and foot and shot execution style. Such discoveries are being made almost daily since a bombing at a Shiite shrine in Samarra.

Assailants in southwestern Baghdad gunned down a man as he was leaving a Shiite mosque, police said.

A Baghdad policeman driving on a rural road in Latifiyah, about 20 miles south of the capital, was killed by gunmen, police said. Four men riding in the car were wounded.

Elsewhere, two civilians were killed and 10 wounded when gunmen attacked U.S. troops stationed at the governor's office in Ramadi, 70 miles west of Baghdad.

Gunmen killed four guards at archaeological sites in the northern city of Mosul. A fifth policeman and a bystander were wounded.

A roadside bomb exploded on a police patrol in Baqouba, 35 miles northeast of Baghdad, killing one officer and injuring 10 others, the Iraqi military said.

Near the southern city of Basra, two officials of the Iraqi Islamic Party were gunned down by four assassins.

In the northern region of Kirkuk, two Iraqi soldiers were found stabbed to death two days after they were reported kidnapped, U.S. authorities said.