US soldiers inspect a burning US armoured vehicle after a roadside bomb attack in Baghdad April 24, 2007. [Reuters]

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The attack occurred in Diyala province, a volatile area that has been the site of fierce fighting between US and Iraqi troops, Sunni insurgents and Shiite militias, according to a statement.

Meanwhile, US officials signaled that they might reconsider putting a three-mile concrete barrier around a Sunni Arab neighborhood in Baghdad after Iraq's struggling prime minister came under pressure from Sunnis and ordered the project halted. With the latest snag in US-Iraqi security cooperation, insurgents delivered a fresh example of the style of attacks that the military said the wall was designed to deter - seven bombings that killed at least 48 people across Iraq.

Plans for the separation barrier to protect the Azamiyah neighborhood were in doubt after Prime Minister Nouri al-Maliki criticized the idea of creating "gated communities" to separate Baghdad's sectarian neighborhoods.

Speaking during a tour of Sunni-led Arab countries, the Shiite Muslim prime minister said he did not want the 12-foot-high wall planned for Azamiyah to be seen as dividing the capital's sects.

Iraq's Sunni Arab minority dominated during Saddam Hussein's reign, and its members remain deeply distrustful of Shiite intentions and provide the backbone of the Iraqi insurgency.

Shiite militias, in turn, have been attacking Sunni neighborhoods in retaliation for insurgent attacks on their own communities.

Azamiyah's Sunni residents have been the target of frequent mortar attacks by Shiite militants, but hundreds of people in the district took to the streets to protest against the wall that they said would make their neighborhood "a big prison."

The new American ambassador to Iraq, Ryan Crocker, defended the barrier plan Monday, saying it was an effort to protect the Sunni community from surrounding Shiite areas, not to segregate it.