Saboteurs blew up part of a key oil pipeline in northern Iraq which was still ablaze Friday following a big overnight blast, a senior official in the nearby refinery town of Baiji said.
"It was a crude oil pipeline going from Kirkuk to Baiji," Majid Mamuni, general director in charge of pipelines at the refinery, said.
"I think it was sabotage," he added.
Police and witnesses at the scene said a large explosion rocked Baiji Thursday night, while a fire along a section of pipeline was still raging Friday near the refinery town.
"It is an attack, a sabotage," said a high-ranking Baiji police officer who asked not to be identified. "It could be the Fedayeen (pro-Saddam Hussein militia), or supporters of the old regime, or criminals."
Ayed Ayed Abdullah, a resident of Tal Abu Jarad village a few hundred metres (yards) from the scene, said he heard what "sounded like a bomb" as he was preparing for Thursday night prayers.
Thick black smoke billowed high into the sky, as intense heat from the fire prevented engineers from approaching the blaze.
US military helicopters were seen hovering over the fire four kilometres (2.5 miles) from the refinery, while six US military vehicles stopped nearby, with its occupants assessing the situation for 20 minutes before departing.
One engineer from the refinery said emergency safety mechanisms were employed to shut down the pipeline and prevent an escalation of the damage.
The police officer had earlier mistakenly identified the stricken line as a gas pipeline, Mamuni said.
Officials from the US-led coalition running Iraq said they were looking into the incident.
Baiji is about 200 kilometres (125 miles) north of Baghdad and is a vital hub in the network of oil pipelines which criss-cross Iraq.
It also falls within the northern tip of the so-called Sunni Muslim triangle, a wedge of north-central Iraq known for its support of Saddam Hussein's Sunni-dominated regime and the high number of attacks on US troops there.
Sabotage and looting have plagued Iraq's oil sector, with pipelines suffering crippling damage, while just 150 of 700 oil wells are in working order, officials have said.
The incident heightens concerns over Iraq's capability to maintain security on its pipeline network just as the main export line from Iraq's northern oilfields to Turkey, which runs through Baiji and was wrecked in a previous sabotage attack, was supposed to reopen.
A coalition official said it was still unclear whether the new attack would delay the reopening which had been set for early this month.
Oil is crucial to the coalition's plans to rebuild Iraq. The coalition is banking on oil sales of 3.4 billion dollars this year, which would supply half the six-billion-dollar state budget it announced earlier in the month.
On Tuesday the coalition said Iraq's oil output now exceeded one million bpd, up from 800,000-900,000 bpd. It aims to boost production to three million bpd by summer 2004.
On Thursday the oil ministry said Iraq had signed a second batch of major oil contracts, with 12 foreign companies, for 650,000 barrels per day (bpd).
The contracts, due to begin Friday and last through the year, were signed with US firms ExxonMobil, ChevronTexaco, ConocoPhilipps, Marathon and Valero Energy, and also with European firms Shell, BP, Total, Repsol YPF.
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