At least two rockets have been fired towards the Sheraton and Palestine hotels in central Baghdad causing damage and starting a fire in the area, witnesses said. Shortly after the attack on Thursday, bursts of gunfire could be heard in the city centre. Iraqi police sealed off access to the heavily fortified hotel complex. There were reports of a car bomb going off in the vicinity shortly after the missiles struck their apparent targets. Flames and smoke could be seen rising from the area around the Sheraton hotel, used by foreign contractors and journalists. There were no immediate reports of any casualties. A source at Iraq's Interior Ministry said three Russian-made Katyusha rockets were used in the attack. A tree was on fire at the front entrance to the hotel, which stands across the Tigris river from the heavily fortified Green Zone, a complex housing the interim Iraqi government and US and British embassies. **Explosion*** A resident of the Sheraton hotel said one rocket had hit a room on the first floor and a second explosion followed immediately afterwards. Windows in the Sheraton were shattered and the main lobby was filled with smoke and debris. Panic-stricken residents fled from the building, the lobby of which was littered with shattered glass and bits of rubble. Fighters have attacked the Sheraton and Palestine hotels, which stand alongside one another inside a fortified wall and guarded by US troops, several times over the past year, often firing mortars towards the buildings **PHOTO CAPTION*** A fire burns outside the Sheraton Hotel in Baghdad, Iraq Thursday night, Oct 7, 2004 (AP)