Continuing violence and threats of kidnapping in Iraq have prompted a number of governments to urge their citizens to leave immediately. Several companies involved in reconstruction have announced they are pulling out.
Up to 2,500 US soldiers were last night massing on the outskirts of the holy city of Najaf for what could be the prelude to a showdown with the radical Shia cleric Sheikh Moqtada al-Sadr.
There were also reports of a break in the ceasefire in Falluja, the troubled city west of Baghdad, which has been at the centre of the fiercest fighting between coalition troops and Iraqi insurgents.
Under pressure to explain the actions of the US-led operation in Iraq, President George Bush last night gave a rare press conference on prime time television in the US.
"The President wants to give the American people an update on Iraq and talk about the way forward," White House spokesman Mr Scott McClellan told reporters.
The President will not be able to turn to the UN to help him as the UN Secretary General, Mr Kofi Annan, said yesterday that the violence in Iraq would prevent the world body from re-establishing a major presence in the country any time in the foreseeable future.
Russia, France and the Czech Republic all advised their nationals to get out, as three Czech nationals remained missing and a French journalist joined the list of hostages. Several Russian companies said they would evacuate their staff, and Australia, a key member of the US-led "coalition of the willing", also urged its citizens not to go to Iraq and told those already there to leave if they were worried about their security.
The coalition confirmed that 40 civilians from a dozen countries are being held hostage by kidnappers.
In an apparent sign of the pressure being felt in the US about the way the situation is unfolding, American military officials announced yesterday that the surviving sisters of female soldier Michelle Witmer, killed in Iraq, will not be compelled to return to the battlefield.
The standoff between US troops and supporters of Sheikh al-Sadr could plunge Iraq into even more chaos. Yesterday soldiers in Baghdad detained a senior aide to the cleric and held him for questioning for five hours at Baghdad's airport, before he was released with an apology.
The incident will have enraged Sheikh al-Sadr's supporters and follows a pledge by the US's most senior officer in Iraq to "kill or capture" the cleric, who is blamed for leading the violent uprising across southern Iraq a week ago. The military appears to be steadily increasing pressure on the cleric and has threatened to destroy his militia.
US forces were last night 10 miles from Najaf, an area normally controlled by a Polish-led multinational force. Soldiers had set up checkpoints and were preventing militia gunmen from leaving. "We are here waiting to be unleashed. We are more than ready," said Col Dana Pittard, commander of the 3rd Brigade Task Force.
Yet earlier in the day the Shia rebellion had appeared to be retreating. Sheikh al-Sadr's militia began to withdraw from police stations and government buildings in Najaf, Kufa and Kerbala - three religious cities in the south where they had been in control.
Sheikh al-Sadr (30) said yesterday he was willing to die for his rebellion against the US occupation but he also admitted negotiations were under way and suggested a resolution could be reached. He said he only wanted to keep foreign troops out of Najaf, Iraq's holiest city.
"My only demand for the time being is the liberation of Najaf and the withdrawal of occupation forces from it," he said.
Even if the US military agrees to keep troops outside Najaf, commanders will press for the arrest of Sheikh al-Sadr and the disbanding of his militia.