Iraqi insurgents used two children as decoys to smuggle a car bomb past a military checkpoint in Baghdad before blowing up the vehicle with the youngsters inside, US military officials said yesterday.

The ruthless new tactic reflects the increasing use of children to attack American soldiers as a desperate insurgency tries to adapt to increased US security measures, officials said.

Children are often paid by insurgents to fire rocket-propelled grenades and bury roadside bombs, and are sometimes shot dead by US troops who do not know how young they are.

Al-Qaeda terrorists are also believed to be behind a spate of explosions of tankers filled with chlorine in Sunni areas, aimed at cowing the population with chemical weapons into supporting the network dominated by foreign fighters.

Major-General Michael Barbero said that the most disturbing incident yet occurred three days ago in Baghdad when guerrillas used two children to fool American soldiers into thinking that they were a harmless family. “Children in the back seat lower suspicion,” the general told a Pentagon briefing. “We let it move through. They park the vehicle. The adults run out and detonate it with the children in back.”

An Iraqi police official said that the car bomb in which the children died was left in the mainly Shia area of Shaab in northern Baghdad. Eight other people were killed and 28 wounded in the blast. While the merciless tactic was the first recorded incident of children being killed in this type of car bombing, “the brutality and ruthless nature of this enemy hasn’t changed”, General Barbero said.

Lieutenant-Colonel Christopher Garver, a US military spokesman in Baghdad, said that the insurgent groups had been increasingly using children in frontline attacks in recent months.

“We know that children as young as 12, 10 years old are often paid to emplace IEDs”, or improvised explosive devices, that target American and Iraqi army patrols. “I believe the going rate is $125 (£60) per IED, which is dangerous work. If we see people emplacing IEDs at night we may engage that person, not knowing if it is a child.”

US Marines in Fallujah have also reported that boys in their early teens have been firing rocket-propelled grenades at their positions in recent months. At least one of the boys was shot dead for trying to kill Marines.

While Sunni insurgent groups have reacted to the latest increase in US presence by increasing their attacks — another 11 people were killed in bombings and mortar attacks in Baghdad yesterday — the Shia militias have responded largely by melting away.

The Mahdi Army, led by Hojatoleslam Moqtada al-Sadr, has scaled down its attacks on Sunni areas, with many of its commanders heading into the more stable, Shia-dominated south of the country.

Many fear that the Mahdi militia may resurface once US troops turn their attention away from their areas. In a country where every household is allowed one assault rifle for its defence, disbanding such ad hoc militias effectively is difficult. The number of tortured and executed corpses still turning up in Baghdad’s mortuary — at least 30 on Tuesday — indicates that at least some of the death squads associated with the Shia militias are still operating despite the increased checkpoints, patrols and raids.

American and Iraqi troops also fought a five-hour gun battle with insurgents to the west of the capital yesterday that killed eight Sunni insurgents.

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