BAGHDAD, Iraq — U.S. helicopter and tank fire destroyed a Baghdad office of a radical Shiite cleric, and his followers said two people were killed and six injured. U.S. Marines, escorted by Iraqis, entered the center of Fallujah for the first time since the end of the bloody siege last month.

Insurgents bombed the Faw oil pipeline in southern Iraq this weekend, setting off a huge blaze and slashing daily Iraqi oil exports by about 25 percent, or 450,000 barrels per day, an official with the State Oil Marketing Pipeline said Monday.

Insurgents have often attacked the much smaller northern pipeline to Turkey but attacks against Iraq's southern oil facilities, which account for almost 90 percent of the country's exports, have been rare.

Brig. Gen. Jeffery Hammond, deputy commander of the Army's Texas-based confirmed that a U.S. Army helicopter bombed the office of Muqtada al-Sadr, who has led an insurgency against the U.S.-led occupation and is wanted by coalition forces.

Sheik Abdul-Hadi al-Darraji, a spokesman for al-Sadr, said the air attack occurred around midnight Sunday. At the same time, U.S. troops also opened fire from nearby streets, destroying a car and a house, he said.

Al-Darraji said two people were killed and six injured but did not say whether they were al-Sadr fighters or whether the casualties were due to the airstrike or ground fire.

The office in the Shiite neighborhood of Sadr City lay in rubble Monday. Residents took to the streets with white plastic buckets and wheelbarrows to remove the rubble. It was one of two main al-Sadr offices in the Baghdad area.

Hammond, deputy commander of the 1st Cavalry Division, said the building was used to stockpile weapons and was destroyed by fire from M-1 tanks and aircraft.

"By the time we took the building down we killed all the enemy personnel inside," said Hammond, whose division is responsible for Baghdad.

Hammond said 35 militiamen were killed in gunbattles throughout the area that lasted from midday Saturday until 4 a.m Sunday.

The fighting began after Sadr's forces set up checkpoints throughout the area. Al-Sadr has taken refuge in his Najaf office, surrounded by gunmen.

An International Committee of the Red Cross report disclosed Monday said Red Cross representatives saw American officers mistreating Abu Ghraib prisoners by keeping them naked in total darkness in empty cells.

It also said up to 90 percent of Iraqi detainees were arrested by mistake.

The findings support the agency's allegations that abuse of Iraqi prisoners by American soldiers was broad and "not individual acts" — contrary to President Bush's contention that the mistreatment "was the wrongdoing of a few."

Meanwhile, a previously unknown group warned foreigners in the southern city of Basra — especially Americans, Britons and Kuwaitis — that they will be targeted for kidnapping and assassination.

The warning was made in a videotape from the Al-Taff Martyrs Brigade broadcast by Al-Jazeera television, an Arabic language satellite station based in Qatar. The statement was read by a masked man flanked by armed men, their faces also covered.

"The Al-Taff Martyrs Brigades announce that all workers in the foreign and Arab companies in Basra, particularly the Kuwaiti companies, are target for abduction and killing," the statement said.

"We warn them strongly against walking the streets of Basra. For us, they are same as the Americans, the British and their loyalists. There is no difference between any of them," it said.

Al-Taff refers to the 7th century battle near Karbala in which Imam Hussein, grandson of the Prophet Muhammad, and his followers were massacred by the Umayyads, their rivals for leadership of the Muslim community. Shiite Muslims, who form the majority of Iraq's 25 million people, revere Imam Hussein.

Coalition forces are facing fighters loyal to al-Sadr in Karbala and other southern cities. Over the weekend, al-Sadr's fighters also clashed with British troops in Basra, Iraq's second-largest city.

Marines in Humvees and armored vehicles drove into Fallujah, a Sunni Muslim city west of Baghdad, in a convoy with members of the newly established Iraqi force riding in pickup trucks. The Americans spent about an hour there, meeting city officials and discussing plans to repair damage from last month's fighting, a Marine spokesman, Lt. Eric Knapp, told The Associated Press.

"Freedom of movement is crucial to rebuild and stabilize the city," Knapp said.

The first Iraqi pickup truck flew the red, white and black Iraqi flag, which the Iraqi Governing Council has proposed changing to the outrage of many Iraqis.

"It is a good day for peace in Fallujah," Marine Maj. Gen. James N. Mattis said.

Marines began the siege of Fallujah on April 5 after the killing and mutilation of four U.S. civilian contractors.

Ten Marines and several hundred Iraqis were killed before the siege was lifted in an agreement providing for the Americans to pull back and transfer primary security responsibility to an Iraqi force led by officers from Saddam Hussein's military.

The Fallujah brigade is expected to number some 1,500 fighters, many of them soldiers from the old Iraqi army who live in the area. Also Monday, U.S. occupation chief L. Paul Bremer turned over the Iraqi Ministry of Water Resources to its Iraqi minister, saying the office was ready to govern itself. Some U.S. advisers will remain on the ministry staff.

"Today we pass another milestone on the path to full Iraqi sovereignty," Bremer said in an outdoor ceremony in Baghdad's U.S.-controlled green zone, as machine gun-toting security guards scanned the audience from behind their sunglasses.

The U.S.-led occupation authority has handed control of seven Iraqi government ministries from Western advisers to U.S.-appointed Iraqi ministers, as part of the U.S. plan to give nominal sovereignty to an Iraqi government June 30.

In other developments:

— Bulgarian soldiers patrolling Karbala came under mortar fire early Monday, the Defense Ministry in Sofia said. No casualties were reported.

— Gunmen opened fire on a vehicle in Kirkuk, killing two construction workers from South Africa and a New Zealand, as well as their Iraqi driver, according to the city's police chief, Torhan Abdel Rahman Yusuf.