The US announced an amnesty for hundreds of prisoners in Iraq this morning and quadrupled funds for political transition as it stepped up preparations for the transfer of power to Iraqis in June.
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Pentagon officials said they were considering restructuring the military leadership in Iraq with a four-star general to oversee security issues ahead of Iraqi self-rule, up from the three-star general now in charge.
In Baghdad, officials announced they would release more than 500 prisoners detained as low-level security threats over the past eight months in a gesture of reconciliation.
"In a gesture to give impetus to those Iraqis who wish to reconcile with their countrymen, the coalition will permit some currently detained offenders to return to their homes and families," Mr Paul Bremer, the US administrator in Iraq, said.
The change in policy, which follows last month's capture of the former Iraqi president, comes amid complaints by Iraqis that family members have been detained without good cause or merely for being in the wrong place at the wrong time.
An estimated 9,000 security detainees are currently being held by US forces in Iraq and many more have been briefly detained and released since Saddam Hussein was ousted in April.
"This is not a programme for those with blood-stained hands. No person directly involved in the death or serious bodily harm to any human being will be released," Mr Bremer said.
In the northern oil-rich town of Kirkuk, assailants fired rockets at a police patrol last night, killing one man and wounding two, police chief Mr Abdul Rahamn Corhan said.