Tanks rolled into the heart of the city, with US soldiers tearing down the giant statue of Saddam which towered over the Al-Fardus Square, to the cheers of Iraqi citizens, who had slung a noose around its neck.

The US troops controversially draped the Stars and Stripes over the statue’s head, before removing it and tying the Iraqi flag around the neck.

Civilians queued up to hammer blow after blow into the plinth supporting the statue, while soldiers chatted to journalists, the hatches of their tanks open, although other Marines on foot took up defensive positions.

The statue was felled by a crane attached to a US armored vehicle, with its head then dragged through the streets of the city by Iraqis in a release of emotion pent up during a quarter century of Saddam’s brutal rule.

“The reception by the Iraqis was very warm and this was a big surprise to us. People are very nice,” Staff Sgt. Daniel Attilio said.

One resident marched up to the heavily armed troops with a symbolic peace offering in his hand. “I couldn’t find flowers so I brought you a palm leaf,” said the man wearing a traditional galabiyah gown.

There was no word on the fate of Saddam or his sons, targeted by US planes that bombed a western residential area of the city on Monday. A CIA official said he did not know if the Iraqi leader had survived the attack.

Saddam, who led Iraq through three wars and decades of suffering after taking power in 1979, had vowed to crush a US and British invasion launched three weeks ago to overthrow him. Saddam is thought to try to make a last stand at his home town of Tikrit north of Baghdad.

White House spokesman Ari Fleischer said Saddam had “missed his chance” to go peacefully into exile, hinting the administration believed the Iraqi leader still to be alive. “We still don’t know his fate,” said Fleischer. Russia denied a report that Saddam was sheltering in its Baghdad Embassy.

Iraqi opposition leader Ahmad Chalabi told CNN that he believed Saddam was still alive: “We have no evidence that they have been killed.”

Iraqi forces offered little resistance yesterday as US troops thrust through this sprawling city of five million, amid chaotic scenes of rejoicing, looting and gunfire.

Looters gutted official buildings, hauling off anything from airconditioners to flowers. The Finance Ministry was ablaze late in the day, though it was unclear how the fire had started.

“People, if you only knew what this man did to Iraq,” yelled an old man standing in the road, thrashing at a torn portrait of Saddam with his shoe. “He killed our youth, he killed millions.”

US and British leaders sounded a note of caution that the war launched on March 20 was not over yet. “This we can say with certainty: The tide is turning,” said US Defense Secretary Donald Rumsfeld.

“The regime has been dealt a serious blow. But the coalition forces will not stop until they have finished the job.”

US troops spread through the city to crush remaining pockets of resistance, facing snipers and isolated units prepared to make a last stand.

President George W. Bush was said by an administration official to be pleased with progress in the campaign, but his vice president, Dick Cheney, warned “hard fighting” could lie ahead.

British Prime Minister Tony Blair, Washington’s staunchest ally in the three-week-old war to wrench power from Saddam, also warned: “This conflict is not, however, over yet.”

But on the fringes of the capital, a US commander said his forces had defeated the Iraqi military and were in control of the vast majority of the capital.

As the dramatic scenes unfolded, there were swift calls for the United States and the international community to turn their attention to reconstruction and humanitarian aid.

“We note there is still work to be done, there are places where the regime does have control,” Brig. Gen. Vincent Brooks said at US Central Command in Qatar, adding it was not yet time to declare a cease-fire.

In the streets of Baghdad, people dared to denounce Saddam as a “traitor!” “torturer!” “dictator!”.

“We’re ecstatic to get rid of him after all these years of war and deprivation,” said Dinkha Khosina, joining hundreds greeting US troops racing from Baghdad’s northern entrance to the heart of the capital.

“No good Saddam. Very bad, very bad, very bad,” said Iraqis in one crowd in halting but clear English.

“Today, we are very, very happy. It is a great day. Saddam is finished. Do you know where he is? Is he dead? He will burn in hell,” said a man holding his young child in his arms.

Earlier in Saddam City, Baghdad’s teeming Shiite suburb, people were seen breaking into shops and homes to steal furniture, food, electrical equipment and carpets.

Unconfirmed reports said residents among the heavily-armed population of the quarter had forced out the Fedayeen Saddam militiamen overnight.

In other parts of the capital, men brandishing Kalashnikov rifles delighted the regime was crumbling, while one white-haired man was seen laughing as he repeatedly hit a poster of Saddam with a sandal, a prime insult in Iraq.

Another man intoned the name of “Saddam” and ran his finger across his throat in a mock gesture of execution. But two others appeared to support the embattled Iraqi president: “Saddam Hussein good,” one said.

City residents, hardened after almost 13 years of crippling economic sanctions, started looting symbols of Saddam’s power, notably the irrigation and interior ministries and the headquarters of the Iraqi Olympic Committee, run by Saddam’s elder son Uday.

The heavy fighting has taken its toll on the city’s hospitals, with international aid agencies warning medical supplies were critically low and hospitals were stretched to the limit amid heavy civilian casualties.

Iraqi officials say hundreds of civilians have been killed. The International Comittee of the Red Cross meanwhile said that a Canadian staff member missing since a shooting in Baghdad had been found dead as it temporarily suspended aid deliveries.

The rapid march through the capital came after Iraqi fighters abandoned most of their positions.

Marines had seized Baghdad’s eastern zone, though Iraqi snipers were still posing problems, a US military official said.

Coalition warplanes still buzzed over the capital as smoke filled the skies, bringing air support to ground troops moving through the east and north.

Dozens of Iraqi and Arab fighters in civilian clothing were still holed up behind buildings or in sandbagged positions on the western side of the Al-Jumhurya bridge spanning the River Tigris.

“Baghdad has not fallen and will never fall,” said Mohammed Al-Dahruj, a 24-year-old Syrian who volunteered to fight US-led forces.

US tank fire and artillery pounded the area, as automatic weapons crackled, with US forces trying to crush resistance from the Iraqi position blocking the eastern exit of the bridge.

To the north of Baghdad, warplanes struck Iraqi positions around Saddam’s home town of Tikrit, a potent symbol of his rule.

But the country’s second largest city, southern Basra, was not yet totally under British control, Blair said.

“It is not secure for our troops yet, fully,” he said. “(But it is) more under control today than it was yesterday.”