The afternoon had been relatively quiet; in the morning, insurgents fired off a barrage of rockets at dawn against the American headquarters and hotels popular with Western contractors and journalists.

Unfortunately, the official American reaction was to panic - just as it was in early May when five Western contractors were killed.

In Baghdad, insurgents fired at least three rockets at the Bourj al-Hayat Hotel, home to many Western contractors.

A group of Falluja residents, including some tribal figures, have formed an anti-intimidation council, said the Western contractor.

Discharged military personnel make up the majority of Western contractors.

Another detonated along the perilous five-mile airport road in Baghdad, apparently next to a sport utility vehicle, the type of car favored by Western contractors.

The US State Department had provided funding for trainers including Western contractors and consultants and Ethiopian troops.

Construction has been debilitated by bombings and shootings of Western contractors and Iraqi workers, shortages of materials and poor planning.

A1 Rising security and other overhead costs of Western contractors in Iraq are cutting into the billions of dollars set aside for some 90 planned water projects.

The attack was the second on the Sadeer, where Western contractors live; in March, a suicide bomber killed one person and wounded 40 others.