IRAQI insurgents launched one of their boldest attacks yet on US troops, trying to wipe out an entire American unit with a mixture of terrorist tactics and guerrilla ambush.

After a fierce battle, the American outpost was forced to call in air cover to end the firefight. The attack in the centre of Mosul, Iraq’s once-calm third city which has become increasingly violent, started when insurgents detonated a lorry bomb outside a small army outpost.

As troops rushed from the base to secure the area, they were attacked by dozens of guerrillas armed with rocket-propelled grenades and assault rifles. During the firefight, the attackers called in another lorry bomb, detonated pre-planted roadside bombs and fired mortars at the Americans, who were forced to bring in aircraft to bomb a formation of around 50 guerrillas. The US military estimated that they had killed 25 attackers.

One American soldier, caught in the lorry bomb explosion, died later of his wounds. Another 15 were injured.

Many fighters from Fallujah are believed to have fled to Mosul, an ethnically mixed city in the north, before the American offensive last month on the former rebel stronghold.

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