An explosion that hit a Shia funeral service in the northern Iraqi city of Mosul has killed at least 17 people.

"Many people were killed or wounded when a bomber blew himself up in the hall where the funeral service was being held," one witness said.

The bomber struck when mourners flocked into a hall adjacent to the al-Sadrin mosque in the city's Tamim neighbourhood on Thursday.

Iraqi and US soldiers quickly ringed the scene of the attack.

Dr Ahmad Rajab at the Medical City hospital said his facility has received so far 17 dead and 25 wounded from the attack, but that the toll could be a lot higher.

Police chief killed

Earlier on Thursday, a Baghdad police chief was gunned down in an ambush in the capital's southwestern side that also killed two others, hospital sources said.

"We received the bodies of three policemen, including Lieutenant-Colonel Ahmad Ubaiss," a medic at Yarmuk hospital, who did not wish to be identified, said.

Ubaiss was the chief of the Salhiya police station on the capital's west side, the source said.

Witnesses said armed men in vehicles opened fire on Ubais' convoy at 8am (0500 GMT) as it drove through Darwish Square in the al-Saidiyah neighbourhood.

An hour earlier and in a nearby area, an Iraqi army patrol hit a roadside bomb, damaging a vehicle without causing casualties, according to army Captain Jabbar Amir.

Attacks against Iraq's fledgling security forces are a daily occurrence.

Security obstacle

Two years on, security remains one of the main obstacles in getting the engine of rebuilding going and this was highlighted on Wednesday when a truck bomber rammed into the back of a hotel in Baghdad used by US contractors, injuring 30 of them, four of them seriously.

Muwaffaq al-Rubai, a member of Shia front-runner Ibrahim al-Jafari's bloc and current security adviser to the outgoing US-allied government of Iyad Allawi, said security would top the agenda of the new government while sounding confident that life was getting safer for Iraqis.

"We are progressing very well, security is much better than before," he said on Tuesday, linking the ongoing violence to international terrorism and not the armed fighting, which he said was "finished."

"Terrorism is not only an Iraqi phenomenon ... it will take a few years to eradicate this malignant cancer," al-Rubai said.

In a separate development on Thursday, US forces surrounded Baiji town in northern Baghdad, Aljazeera learned.

Police said the action was taken after a US soldier was killed at the city's police station by unknown snipers.

PHOTO CAPTION

Children play by a burning truck that was carrying goods for a nearby American base and came under attack by unknown gunmen who then set it on fire in the northern town of Mosul in Iraq Monday, March 7, 2005. The fate of the driver was unknown. (AP)