A devastating car bombing rocked a hotel used by civilians in central Baghdad on Wednesday night, two days before the anniversary of the breakout of the US-led war on Iraq. 

At least 27 people were killed and some 40 others were injured in the blast, which completely destroyed the Jabal Lebanon Hotel in the Karrada district, said the US military.

But the death toll was likely to rise as Iraqi rescue workers were desperately digging at the rubble four hours after the bombing took place around 8:15 pm (1715 GMT).

An Iraqi fireman said three children were believed still buried under the debris of a small house near the five-storey hotel.

A US spokesman said some Westerners were supposed to be staying at the hotel when the explosion went off. The small hotel was mainly occupied by Arabs but several British and American businessmen were supposed to be using the building.

US army spokesman Lt. Col. Peter Jones assumed that the blast was detonated by 1,000 pounds (450 kg ) of explosives planted in a vehicle, which created a crater of about three meters deep and seven meters wide. Wreckage of several wrangled cars could be seen at the site, burning in flames.

Jones told reporters that no remains was found inside the detonated vehicle.

US troops cordoned off the area and conducted an investigation. Colonel Ralph Baker said initial results showed that the techniques used in the bombing was quite similar to those previously used by Ansar al-Islam, suspected of being linked to the al-Qaida terror group.

Blaming the killing on "foreigners," Adnan Pachachi, member of the US-installed Iraqi Governing Council, said the deadly attack, targeting one of the busiest areas in Baghdad, was meant to "create havoc and destabilize the country."

The United States also condemned the bomb attack, vowing that terrorists will not prevail.

"This remains a time of testing in Iraq. The stakes are high. The terrorists know the stakes are high," White House spokesman Scott McClellan said at a news briefing in Washington. "But they will not prevail. We will meet this test with strength and with resolve," he added.

The latest insurgent strike came as Iraq was about to live through a whole year after the US-led invasion started before dawn on March 20 last year.

In an effort to demonstrate force and crack down on presumed insurgents including Islam extremists, US forces launched the massive Operation Iron Promise in Baghdad in the run-up to the anniversary day. But Wednesday's incident further raised the concern over the level of security around the capital city.

Iraq has been constantly plagued with deadly bombings this year, when over 400 civilians were killed and several hundred others injured across the war-ridden country. The past 40 days turned out to be the deadliest period since US President George W. Bush declared the major fighting in Iraq over on May 1 last year.

Insurgents used suicide bombers, planted bombs and mortars in the near simultaneous bombings on March 2, killing about 170.

A pair of suicide bombings rocked two Kurdish party offices in northern Iraq at the beginning of February, killing over 100 and another two explosions took place at police stations in central Baghdad, resulting in 150 dead.

US and Iraqi officials blamed foreign terrorists with the help of remnants from the former Iraqi regime had moved their target from collaborators of US forces to innocent civilians so as to disrupt the political process.

(Xinhua News Agency March 18, 2004)