Meanwhile, the hunt was continuing for five Britons who were snatched at gunpoint from a finance ministry building in the capital earlier this week.

The soldiers were killed Wednesday when a roadside bomb hit their foot patrol and brought US casualties for the month to 116, the most since November 2004, when marines fought a fierce battle to retake the city of Fallujah.

Unlike at Fallujah, US forces have fought no major set-piece enounters in May, but instead have been fanning out through Baghdad and a belt of flashpoint towns around the capital in a bid to quell sectarian violence.

"First and foremost, it's been a tough month," Brigadier General Perry Wiggins, deputy director of regional operations with the US Joint Chiefs of Staff, told reporters at a Defence Department briefing on Wednesday.

"We're moving into places where we haven't been, not necessarily before."

April was also bloody for the US-led coalition, with 104 deaths. Taken together, the two past months have been the deadliest since the war began.

The news will increase pressure on US President George W. Bush, who has already seen domestic support for his war strategy fall to an all-time low and is facing calls to set a timetable for troops withdrawals.

May's casualties coincide with a "surge" in US reinforcements, which is due to peak next month. Under this plan, US and Iraqi troops are basing themselves in exposed patrol bases in order to control Baghdad street by street.

The result has been a drop off in attacks by sectarian death squads, with every day bringing more arrests of kidnappers and weapons smugglers, but bomb attacks have continued and US troops now face an insurgent backlash.

US commander General David Petraeus hopes that the surge will provide breathing space for Prime Minister Nuri al-Maliki's government, allowing him to push through laws to underpin a programme of national reconciliation.

But the capital's centres of power are still far from safe.

Almost daily, rockets and mortar shells hit the Green Zone -- the fortified district protecting the US embassy and Maliki's administration.

And on Tuesday, a squad of gunmen in police uniforms stormed a finance ministry building outside the zone in downtown Baghdad and dragged off five British visitors, a management consultant and his four bodyguards.

The Britons are still missing, amid fears they have fallen into the hands of one of the Shiite militia groups that have infiltrated Iraq's police.

Insurgents also struck an important propaganda victory on May 12, when an Al-Qaeda gang destroyed a small US patrol manning a temporary observation post near Mahmudiyah south of Baghdad, killing four soldiers and capturing three.

The corpse of one was later found floating in the Euphrates river, with gunshot wounds to the head and torso. Almost three weeks after the attack his two comrades are still missing, despite a massive US manhunt.

The missing men's commander, Colonel Michael Kershaw of the 10th Mountain Division's 2nd Brigade Combat Team, said interrogations of suspects had thrown up a number of leads and that the search would continue.

"Obviously we have a number of different trails we are following. They all lead to different groups. We know we have some of the people that participated," he told AFP at a base outside Baghdad on Wednesday.

"We know that local insurgent groups participated. We also believe there was a level of involvement from outside the local area," he said.

Kershaw's search area is a 854-square-kilometre (330-square-mile) sector in an insurgent hotbed of palm groves, farming communities and irrigation canals dubbed "The Triangle of Death".

"All units in Iraq are on the lookout for these missing soldiers and they act on intelligence as well. So really it's a nationwide search. Units act on intelligence in their areas as it comes up," the commander added.

Kershaw's troops have questioned 1,100 people and detained 104 of them.

"We have scooped up a few people who have either confessed to it or during questioning shown that they know too much about it not to have been there," said unit spokesman Major Web Wright.

Despite the setbacks in Iraq, the White House remains bullish.

Bush's spokesman Tony Snow told reporters the president was looking at the model of the US military presence in South Korea, which remains in place half-a-century after a cessation of hostilities with Pyongjang.