BAGHDAD, Iraq – As Iraq’s interim government announced its long-awaited special security law Wednesday, dozens of militants fought a gun battle with Iraqi and American troops just blocks away, in the heart of the capital.

Machine-gunfire rattled and helicopters droned near the government center as American forces came to the aid of a group of Iraqi National Guard soldiers who’d been ambushed in broad daylight by better-armed Iraqi insurgents.

One Iraqi guardsman and one police officer were killed, and at least 19 of them were wounded, witnesses said.

The gun battle, seemingly orchestrated to embarrass the new government, underscored a central dilemma as the government contemplates using the law.

To fight crime and terrorism, the measure grants Iraq’s unelected prime minister and his Cabinet the power to impose curfews, ban dangerous groups and detain suspects. But Iraqi security forces may not be up to the job.

Iraqi government officials, standing before Iraqi flags in a room once used by briefers from the now-disbanded Coalition Provisional Authority, insisted Wednesday that Iraqi soldiers and policemen would enforce the law.

Yet Iraq’s fledgling government can scarcely protect its own ministers, many of whom work behind U.S. machine-gun turrets. Much of Iraq’s under-trained, ill-equipped army refused to fight in April when sent into the restive city of Fallujah. Iraqi police officers surrendered or ran away by the thousands when confronted by Shiite Muslim cleric Muqtada al-Sadr’s Mahdi Army.

Army Lt. Gen. David Petraeus, the head of the office of security transition in Iraq, has reported progress in training and equipping Iraqi forces. But he acknowledged that it will take months, if not years, to complete the job.

“How can you carry out this law if the Iraqi forces aren’t qualified yet?” an Iraqi journalist asked the ministers Wednesday.

“We have very high confidence in the forces existing now,” replied Gen. Babekir Zibari, a senior adviser to the defense ministry.

Iraqi forces didn’t share that confidence on Wednesday.

Three National Guard troops who survived the attack, speaking outside a hospital where at least 19 of their comrades lay wounded, said that about 30 of them were patrolling residential Haifa Street when the attackers struck. They said they were outnumbered, outgunned and outmaneuvered by militants shouting “Allah Akbar,” or “God is Great.”

They recognized some of the fighters from the neighborhood, undermining interim government officials’ constant assertions that such attacks are the work of foreign terrorists.

“We cannot win this war with these kinds of weapons,” said Umar Hassan, 19. “They have grenades and machine guns. We are fighting them with AK-47s. Also, the government keeps saying “Arab fighters.’ These were Iraqis who attacked us.”

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Mohammed Jassim, who didn’t give his age, said there were “more than 50 attackers” and added: “Our soldiers, some of them were confused, some of them hid, while others started to shoot.”

Said Wissam Hadi, 33: “They are from the neighborhood. I could recognize them. They are doing that for revenge, because many of their families had been arrested by the Americans.”

Before the attack, four mortar rounds exploded in a Baghdad district near a house used by Prime Minister Iyad Allawi, injuring a woman and her daughter, the prime minister said in a written statement. One of the rounds hit a building where a foundation works to combat chest diseases.

The day could have been much worse. Iraqi police said they defused a car loaded with 1,650 pounds of explosives – enough to level a building – in Baghdad’s Karada neighborhood.

Allawi’s administration assumed sovereignty June 28 after being appointed by the United States and the United Nations. His temporary government is supposed to steer the country toward elections in January.

The new law allows Allawi and his Cabinet to declare a “state of emergency” for up to 60 days in part or all of Iraq. That would allow authorities to detain and search people, even without a warrant, in “extreme exigent circumstances,” according to the English version released Wednesday. It also allows the government to seize terror suspects’ property.

Perhaps unsurprisingly in a country just freed from 35 years of totalitarianism, Iraqi journalists focused on whether the provisions would infringe on civil rights. Ministers insisted they wouldn’t and pointed out that Iraqi judges would review all decisions made under the law.

On the streets, however, people expressed a desire for the government to do something – anything – to stop the violence.

“Personally, I think this law can curb terrorist acts, and I don’t find any other punishment for such criminals justified, except to kill them,” said Salam Orisho, 30, whose family owns a Baghdad grocery store.

One element missing from the law was a much-discussed provision offering amnesty for low-level insurgents.

Government officials have clashed on the subject. On Saturday, Allawi’s spokesman, Georges Sada, suggested that guerrillas who fought U.S. troops could be eligible for pardons because their actions were legitimate acts of resistance.

But the deputy prime minister for national security, Barham Saleh, said the government would remain “firm against people who have committed atrocities and have committed crimes against the people of Iraq and against the coalition forces that have come to help us overcome tyranny.”

At Wednesday’s news conference, Justice Minister Malik Dohan al Hassan suggested that the government would be willing to suspend the murder warrant seeking the arrest of al-Sadr for three years. Al-Sadr’s militia had seized several southern cities in April. Nineteen U.S. soldiers were killed in the resulting battles.

Al Hassan also made an extraordinary statement that seemed to sum up the dilemma confronting Iraq’s weak new government. He suggested that anyone with enough armed loyalists to fight off police arrests might be immune from a murder charge.

“Let me give you another example,” he said. “If a tribal leader led to the murder of one person, but arresting this tribal leader would cause the deaths of 200 people, we would consider suspending the warrant to avoid the casualties.”

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(Special correspondents Saleem Khalaf, Omar Jassim and David George contributed to this report.)

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(c) 2004, Knight Ridder/Tribune Information Services.

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PHOTOS (from KRT Photo Service, 202-383-6099): USIRAQ

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