Troops of the U.S. 101st Airborne Division were meanwhile locked in fierce house-to-house fighting for control of the holy city of Karbala, 80 kilometers (50 miles) southwest of Baghdad, with one U.S. soldier dead and eight wounded.

"I suppose you would have to say that the regime controls large sections of Baghdad," Deputy Defense Secretary Paul Wolfowitz told Fox News.

General Peter Pace, vice chairman of the Joint Chiefs of Staff, said, however, that U.S.-led forces surrounded the Iraqi capital.

"There is a significant military force all around the city of Baghdad," he told CNN.

"We do control highways in and outside the city. We have the capability to stop, interdict and attack any Iraqi forces that might try to either escape or engage our forces," Pace said.

Meanwhile, British tanks rolled into the center of Basra on Sunday and surrounded the local Baath Party headquarters, effectively taking control of Iraq's southern metropolis, military officials said, AFP said.

"We control the vast majority of the city," British military spokesman Colonel Chris Vernon said here. "But there are some places we don't control, for example the old city."

Vernon told reporters that British tanks had moved into the city center, the south and the north.

At least 300 Fedayeen militia fighters were estimated to have died in clashes over two days as the British surged forward, a senior officer claimed.

Colonel Hugh Blackman, of the Royal Scots Dragoon Guards, said around 150 Iraqis were killed on Saturday during fierce exchanges with his men and at least the same number died during Sunday's assault, with only "a couple of dozen" taken alive.

By late afternoon, the British forces had surrounded the local Baath Party headquarters in the heart of the city, a reporter for the Arabic language Al-Jazeera television station in the city reported.

A British soldier was killed in Sunday's major push into the center of the Iraqi city Basra, a British spokesman said.

"We have suffered one fatality," Lieutenant Commander Emma Thomas told AFP.

"There are no further details while the next of kin are informed."

A U.S. military source claimed in press statements that the first U.S. military aircraft landed at Baghdad airport on Sunday.

"At least one aircraft has landed at the airport," the senior source in the U.S. 3rd Infantry Division's aviation brigade, who was at the airport, told the Reuters news agency.

He said a C-130 military transporter landed at about 8 p.m. local time, about an hour after dark, on the western, military side of the airport. He gave no details of whether it was carrying a load.

U.S. forces said they seized the airport, some 12 miles southwest of the city center, on Friday, and added on Sunday they controlled practically all road access to the city too.

But Iraqi Information Minister Mohamed Said Sahhaf affirmed that all of the invading forces were forced to retreat back to the southeastern areas due to ferocious resistance from the Iraqi forces that left the airport for tactical reasons.

"The U.S. and British forces were forced back in all of the areas with heavy fire from Iraqi artillery. We only left approaches to the airport open to the invading forces according to special calculations" Sahhaf told a daily briefing.

Sahhaf added that the Iraqi fighters shot dead some 50 U.S. troops in the puzzling airport battle, while the U.S. Central Command said that up to 2,000 Iraqi troops have been killed in the fighting.

While Pace insisted that U.S. troop advances into Baghdad notably aimed at giving the Iraqi forces "the opportunity to see we are equally effective in and around the city as we already were in the battlefield."

He said that in the raids the U.S.-led forces destroyed "all of the enemy vehicles and personnel with whom they came in contact." Pace urged Iraqi commanders to lay down their weapons.

"We prefer that the leaders of the Iraqi armed forces do the honorable thing: stop fighting for a regime that does not deserve your loyalty. Surrender your forces and give yourselves and your troops an opportunity to be a part of Iraq's future and not a part of Iraq's past."

"Already we've made enormous progress, and our troops are outside of Baghdad (and) control Baghdad International Airport," he said.

The U.S. military also said it had captured or killed fighters from Sudan, Egypt and other countries in Iraq, and some of those captured had led it to a “terrorist” training camp.

Brig. Gen. Vincent Brooks told a briefing at Central Command in Qatar that the camp, found at Salman Pak southeast of Baghdad, demonstrated "a linkage between this regime and terrorism." But he said there was nothing to tie the camp to specific organizations.

The Pentagon also said the U.S. troops had to destroy a U.S. tank that broke down on the outskirts of Baghdad that Iraq said its forces knocked it out in intense fighting on Saturday.

"One tank, in fact, did break down and we had to destroy it," Wolfowitz said.

Another top Pentagon official said "the tank tread was knocked off by a rocket-propelled grenade so the tank itself could not move."

"The crew was not at all injured. They got out of the tank and joined their buddies in the rest of the column," General Peter Pace, vice chairman of the Joint Chiefs of Staff, told CNN.

Iraqi officials took journalists to see the wreck of a U.S. Abrams tank on the outskirts of Baghdad, saying it was destroyed in the fighting which killed five Americans.

Iraqis with Kalashnikov rifles danced triumphantly over the damaged and charred tank in the Sayadia area, a southern entrance to the capital.

In the meanwhile, explosions were heard close to the Syrian border with Iraq, near a transit camp for refugees fleeing the embattled country, a spokesman for the United Nations refugee agency, UNHCR, said here.

"We've had reports this morning of explosions in the vicinity of Syria's Abu Kamal border crossing which lies along the Euphrates River," Peter Kessler told reporters.

In another act of defiance, the Iraqi television showed footage of President Saddam Hussein chairing a meeting of top political and military advisers, including his two sons.

Saddam, wearing military uniform, smiling and with a cigar in his hand, was seated at a large table in a small room, whose location was not specified.

Besides Uday, who heads the Saddam Fedayeen volunteer paramilitary force, and Qussay, leader of the elite Republican Guard, the meeting included Iraqi Vice President Taha Yassin Ramadan, Defense Minister Sultan Hashem Ahmad and Latif Nuseif Jasem, a member of the ruling Baath party's leadership.

The meeting was also attended by "a number of military commanders", whom the television did not name.

The scene was similar to one shown on Saturday but differed in detail.

The latest broadcasts followed a televised address Friday by Saddam and rare images of the security-obsessed Iraqi leader touring his capital, which has been battered by two weeks of U.S.-led air strikes.