A US flying gunship has pumped shells into suspected militant positions in the Iraqi city of Falluja in one of the heaviest attacks since the siege began.
US forces say they were acting in self-defence
One witness said the earth had shaken beneath his feet as detonations succeeded at a rate of 10 a minute during the night.
US forces say their positions in the north of the city had come under fire.
Loudspeakers in some of the city's reputed 70 mosques broadcast verses of the Koran during the shelling.
The BBC's Jennifer Glasse, with US forces outside Falluja, said commanders described the action as "defensive in nature".
The assault began as United Nations Iraq envoy Lakhdar Brahimi was briefing the UN Security Council on the planned transfer of power on 30 June.
Mr Brahimi said the timetable for setting up an interim government in Iraq was tight but achievable.
He said it should be possible to name the members of the caretaker administration by the end of May.
The latest fighting also came hours after a US deadline for Falluja militants to hand over their weapons.
US marines moved in to "pacify" Falluja on 5 April
An AC-130 gunship aircraft fired cannon rounds at suspected militant positions and arms depots.
It let off 20 to 25 rounds at a time with "explosions on the ground sending showers of sparks and flames into the night sky", our correspondent reported from the scene.
"I can hear more than 10 explosions a minute," an unidentified witness told Reuters news agency.
"Fires are lighting the night sky. The earth is shaking under my feet."
Hundreds are said to have been killed in the siege of the town, a hotbed of anti-coalition violence.
Plans to begin joint patrols of US marines and Iraqi security forces in the town were shelved after heavy fighting on Monday.
US forces said on Tuesday they had killed 64 Shia Muslim militiamen and destroyed an anti-aircraft weapon in fighting near the holy city of Najaf.
The clashes took place on Monday night, hours after US troops had moved into a base in Najaf being vacated by Spanish troops.
The clashes between US soldiers and Shia militiamen loyal to anti-US cleric Moqtada Sadr took place on the outskirts of the town of Kufa, some 10km (six miles) north-east of Najaf.
Elsewhere, the Red Cross visited Saddam Hussein for a second time since he was jailed in December.
US military spokesman Brig Gen Mark Kimmitt said the coalition would continue to meet its "obligations under international law" regarding the former leader.