A freelance American journalist who wrote about alleged corruption and lawlessness in the Iraqi city of Basra has been abducted at gunpoint and shot dead.

Steven Vincent's body was recovered at the side of a road south of Basra late last night, several hours after he and his female translator were kidnapped as they left a currency exchange shop, within sight of a British military checkpoint.

He had been shot three times in the chest. Nouriya Itais, the translator, who was also his fiancee, was shot four times and seriously wounded, according to a nurse in a Basra hospital.

The news broke hours before 14 US Marines and an Iraqi interpreter were killed in lawless Anbar province in western Iraq.

There is speculation that Mr Vincent, who received death threats, was murdered in an attempt to silence him. Four days before his death he had written an opinion piece in The New York Times in which he said that the police force in the British-controlled city had been infiltrated by Shia Muslim extremist militias, who were responsible for carrying out hundreds of murders of prominent Sunni Muslims.

He criticised the British, whose 8,000 troops in the area are responsible for security in Basra, for turning a blind eye to abuses of power by Shia extremists. The whole city was "increasingly coming under the control of Shia religious groups, from the relatively mainstream... to the bellicose followers of the rebel cleric Moqtada al-Sadr".

In his final blog, he wrote: "The British stand above the growing turmoil, refusing to challenge the Islamists’ claim on the hearts and minds of police officers."

Quoting an unnamed Iraqi police lieutenant, Vincent wrote: "He told me that there is even a sort of 'death car': a white Toyota Mark II that glides through the city streets, carrying off-duty police officers in the pay of extremist religious groups to their next assignment," he wrote.

Today, Lieutenant Colonel Karim al-Zaidi of Basra police said that Vincent and the translator were kidnapped by five gunmen in a police car.

James Hider, Times correspondent in Iraq, was with Vincent in Basra last week when the blogger thought he had spotted the white Toyota and rapped on the window.

Hider wrote today: "We told him not to point at it. Another journalist reassured him that the word on the street was that a different vehicle was now being used for assassinations.

"Last night, as he walked with his translator to exchange some money outside the Merbid Hotel in Basra, he found out what the new 'death car' was: a brand new white Chevrolet pick-up without registration plates but with the word 'Police' written on it."

Vincent was aware that his writing put him in danger. On July 9, he flagged up on his blog an article that he had written for the Christian Science Monitor about the religious parties who he said now dominated Basra. He wrote: "When you read this, keep in mind that for various reasons - not the least of which were safety concerns - the piece only scratches the surface of what is happening here."

But Hider said that there was another theory about why Vincent died. "He openly criticised the militias, in particular the influence of the maverick Shia cleric Moqtada al-Sadr over the police. But he may also have been a victim of the strict moral codes now imposed on the once libertine southern port: people knew he was having an affair with an Iraqi woman, and spoke of it disapproving whispers around the hotel."

His murder could be the first targeted killing of a journalist since the invasion of Iraq. Today the US Embassy refused to speculate about the motive.

Pete Mitchell, an embassy spokesman, said: "I can confirm to you that officials in Basra have recovered the body of journalist Steven Vincent. The US Embassy is working with British military and local Iraqi officials in Basra to determine who is responsible for the death of this journalist. Our condolences go out to the family."

Police said that Vincent, a writer who had been living in New York, had been staying in Basra for several months working on a new book about the history of the city. He was the author of a well-received book describing the breakdown of society in post-invasion Iraq, called In The Red Zone: A Journey into the Soul of Iraq,

His website describes him as a freelance investigative journalist and art critic, whose work had appeared in many major newspapers and magazines including the Wall Street Journal and Harper’s.

Sunni Muslim leaders have accused the Iraqi Government of turning a blind eye to alleged Shia hit squads that work alongside security and police forces, in the way that Irish republicans once alleged that loyalist terror groups operated alongside the Royal Ulster Constabulary in Northern Ireland. The religious Shia-led government denies the accusations.

Meanwhile, the Sunni-led insurgency in Iraq has mounted hundreds of suicide bombings, killing thousands of mainly Shia Iraqis. Sunni insurgents have also kidnapped more than 150 foreigners, some of whom have been shot or beheaded.

Until recently, Basra - a predominantly Shia city - has been relatively free of the violence, but residents say that the security situation has deteriorated as fundamentalists gained a grip on the city. Hojetoleslam Moqtada al-Sadr's militias have mounted two violent rebellions against US forces.

According to the New York-based Committee to Protect Journalists, as of June 28, at least 45 journalists and 20 media support workers have been killed while covering the war in Iraq since March 2003. Insurgent actions by Sunni Muslims are responsible for the bulk of deaths.

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