Iraqi security forces on Monday failed to rescue dozens of kidnapped Shiites despite capture of 10 suspect kidnappers, the Interim Government said.

Care-taker Prime Minister Iyad Allawi's office said in a statement that 10 suspects were captured and a weapon cache found, but security forces did not find any hostage in the town of Madain.

The operation came two days after Sunni gunmen kidnapped more than 80 Shiite Muslims and threatened to kill them unless all Shiites left the town, 30 km southeast of Baghdad.

Some 1,500 Iraqi security forces and US troops entered the town at dawn on Monday, sealing it off and launching house-to-house search. US tanks were seen guarding in streets and helicopters hovering overhead.

A curfew was imposed in the town of 7,000 residents, as streets were deserted and shops closed. Mosque loud speakers called on people to stay at home to avoid troubles.

As of midday, Iraqi security forces controlled Madain, also called Salman Pak, which falls within the restive area known as Death Triangle.

The city had been virtually out of control before the operation, as assassinations and kidnappings had occurred daily and even Iraqi police were scared off.

"We are afraid that the military operation will lead to sectarian troubles," Saed Abdullah, a local resident, told Xinhua by phone.

He said many people had left the town after the kidnapping and were told "never come back" by the Iraqi National Guards.

Sheikh Abdul Salam al-Kubaisi, a spokesman for the Association of Muslim Scholars, an influential Sunni cleric organization, denied that hostages had been taken in Madain.

"This news is completely untrue," he told the al-Jazeera television channel.

On Sunday, Sheikh Abdul Hadi al-Darraji, a top aide to radical Shiite cleric Moqtada al-Sadr, told Xinhua he believed "what was said by the media about forcing Shiites out of Madain is all lies."

"The aim of such a rumor is to incite sectarian divisions in Iraq," Darraji said.

Sectarian tension has been running high in the violence-ravaged country since the Jan. 30 parliamentary elections.

A Shiite alliance won 140 seats in the 275-member National Assembly, while the Sunnis, a minority enjoying privilege under Saddam Hussein's regime, were under-representative due to a boycott.

(Xinhua News Agency April 19, 2005)