BAGHDAD, Iraq (AP) – U.S. troops killed seven insurgents and captured three others in a Monday raid that also left two children dead not far from the safehouse where terrorist Abu Musab al-Zarqawi died in a U.S. bombing raid.

The military said the insurgents belonged to a terrorist cell with ties to senior al-Qaida leaders involved in helping foreign fighters come to Iraq.

More than 200 raids have been carried out since al-Zarqawi’s death Wednesday, some of them directly connected to what the U.S. military has described as a “treasure trove” of intelligence gleaned from his safehouse.

Iraqi National Security Adviser Mouwafak al-Rubaie said troops combing though the debris found al-Zarqawi’s diaries, telephone numbers, computers and a database in one computer.

“We’re cautiously optimistic that we have been very successful thus far,” Maj. Gen. William Caldwell, a U.S. military spokesman in Baghdad, said Monday. “We realize this is not going to end the insurgency and that it’s really going to take the people of Iraq making that decision.”

Caldwell also said a “high-value individual” with a $50,000 price on his head was detained. He did not name the suspect, but said he was picked up based on a tip.

The raid that killed the two children took place in Hashimiyat, a district of Hibhib, where al-Zarqawi was killed.

Residents in Hashimiyat, near Baqouba about 35 miles northeast of Baghdad, accused American troops of targeting civilians to find insurgents.

A man wearing a white dishdasha held the charred body of a child whose head had been blown in half. Other Iraqis screamed “Allahu akbar,” or “God is Great,” and raised their hands despairingly as they put the charred bodies of children – a 6-month-old and a 4-year-old – into wooden coffins and loaded them onto trucks.

AP Television News video showed burned-out vehicles and a devastated house with a large hole in the roof.

“That was an extremely unfortunate situation,” Caldwell said. “Any time we’re out conducting operations against terrorist elements and they mix themselves in with innocent young women and children and civilians, they in fact are asking for that possibility to occur.”

The military said in a statement that three terror suspects were wounded and detained in the raid. Coalition forces seized a rocket-propelled grenade launcher, five rockets, nine AK-47 assault rifles and 20 loaded ammunition magazines.

“Coalition aircraft supporting the ground force immediately suppressed the enemy fire, killing seven,” the military said in a statement. “Following the assault, coalition troops discovered two children had been killed. One child was wounded and evacuated for treatment.”

The raid came as insurgents escalated their attacks, killing more than 50 people across the country Monday in a bid to show they were not defeated after al-Zarqawi’s death.

In Baghdad, bombs in parked cars killed at least 11 people and wounded 54, police said. The first explosion in Sadr City, a sprawling Shiite district, killed six people. A second bombing in an upscale western district killed five and wounded 13, said police Lt. Maitham Abdul-Razza.

In Tal Afar, 260 miles northwest of Baghdad, a suicide car bomber plowed into a gas station, killing four civilians and wounding more than 40, police Brig. Gen. Abdul-Hamid Khalaf said.

A roadside bomb struck a minivan in southern Baghdad, killing six people and wounding 10, police Capt. Jamil Hussein said. Nineteen others died in bombings, including six who were killed when a suicide car bomber attacked a gas station in Balad.

Elsewhere, a roadside bomb detonated next to a police patrol east of Kirkuk, but missed and struck a civilian car. One person was killed in the explosion and two were wounded, police said.

Al-Qaida in Iraq insisted in a Web statement that it remains powerful after al-Zarqawi’s death.

The statement said the group’s leadership “renews its allegiance” to Osama bin Laden. A separate Web statement posted Monday named Abu Hamza al-Muhajer the new leader of al-Qaida in Iraq.

The name – a pseudonym, as most militants are known – was not immediately known and did not appear to be on any U.S. lists of terrorists who have rewards on their heads.

Prime Minister Nouri al-Maliki’s new security team has moved ahead with a plan to restore peace in Baghdad, which has suffered most from suicide attackers, roadside bombs and sectarian death squads. He said the government will announce the plan this week.

But al-Maliki must also deal with political challenges.

Radical anti-U.S. cleric Muqtada al-Sadr called for the resignations of three Shiite Cabinet ministers, saying they lacked qualifications and experience to run their ministries.

Al-Sadr, a Shiite, accused at least one of them, Saad Tahir Abid, of having ties to Saddam Hussein’s Baathist regime, officials said.

Hassan al-Rubaie, a member of al-Sadr’s bloc, said Abid, the minister of state for provincial affairs, Liwa Semeism, the minister of state for tourism, and Karim Mahdi, the transport minister, already had offered their resignations. He said al-Maliki would decide whether to accept them soon.

A reconciliation conference among Iraq’s feuding factions has been postponed until August. The Arab League had hoped to hold the conference – initially planned for February – on June 22 in Baghdad.

Shiites have firmly opposed opening the peace conference to Sunni Arab officials from Saddam’s former regime or from pro-insurgency groups.

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