At least five Iraqis were killed when a powerful explosion rocked a restaurant in Baghdad late Wednesday night on the New Year's Eve, witnesses and Iraqi police said. 

About 35 others, including three foreign journalists, were wounded in the explosion, which took place at the Nabil Restaurant in the Arasat district, according to hospital sources.

The restaurant building was seen in flames and several cars parked outside were totally damaged, and windows of houses 200 meters away were shattered into pieces.

Sirens wailed and ambulances raced to the scene.

Firemen struggled to put out the fire as US troops and Iraqi security force cordoned off the area, which was turned into a total mess by the powerful blast. Two or three helicopters were hovering over the wealthy area.

Rescuers were seen pulling injured people out of the restaurant, where probably two dozen of people were staying to celebrate the New Year before the explosion, said witnesses.

The two-storey luxurious restaurant was holding a New Year party, which has been rare since 1990 in the war-torn country, at the time of the blast, they said.

Iraqi police said it was still too early to identify whether it was a suicide car bombing as many suspected.

The capital city has witnessed at least two bomb explosions earlier in the day on the eve of the New Year holiday. An Iraqi child was killed, eight US soldiers and three Iraqi Civil Defense Corps members were wounded in the incidents.

The fresh attacks took place while the US military and the Iraqi police stepped up security measures against possible insurgent assaults devised to tarnish peace-keeping efforts.

US Brig. Gen. Martin Dempsey told reporters earlier in the day that his troops in charge of the Baghdad area had received intelligence about attacks in the capital during the holiday.

Extensive bombardments and gunfire could be heard later at night as the US troops continued their week-old Operation Iron Grip, which had resulted in disrupting four cells of former regime elements.

Four anti-US personnel were killed and 185 enemies were captured while hundreds of rockets and mortar rounds were confiscated during the offensive operation, the military said.

Insurgents using rockets and mortars have launched intensified attacks across Iraq following the capture of Saddam Hussein on Dec. 13.

(Xinhua News Agency January 1, 2004)