American officers said that barrage was provoked when someone fired on the convoy from the crowd. 

Wednesday's march was to protest earlier bloodshed Monday night, when 16 demonstrators and bystanders were killed and more than 50 wounded, according to hospital counts. In that clash, an 82nd Airborne company, whose members said they were being shot at, fired on a protest outside a school occupied by U.S. soldiers. 

Some Fallujah residents said they had heard relatives of victims vow to avenge Wednesday's shootings - and many in the city have declared they want the American troops to leave. 

Brig. Gen. Dan Hahn, the Army V Corps chief of staff, said U.S. forces had solid intelligence that the "bad actors" in Fallujah were members of Saddam Hussein's Baath Party who were using crowds as cover during demonstrations. 

"The people in the city want to get rid of this problem. We have people in the city coming up to tell us who the bad actors are," Hahn said. "In every instance, our soldiers have shown discipline and restraint." 

In the future, he said, tear gas and other riot control measure might be used to quash violent demonstrations. 

Fallujah, a city of 200,000 people 30 miles west of Baghdad, benefited more than most Iraqi towns from Saddam's regime. 

The regime built chemical and other factories that generated jobs for Fallujah's workers and wealth for its businessmen. Many of its young men joined elite regime forces such as the Republican Guard and Special Republican Guard. 

U.S. military officials met Wednesday with local religious and clan leaders on the security situation. 

"We asked the commanding officers for an investigation and for compensation for the families of the dead and injured," said Taha Bedaiwi al-Alwani, the new, U.S.-recognized mayor of Fallujah. 

Residents told reporters they were troubled by soldiers looking at Fallujah women, and some believed the Americans' goggles or binoculars could "see" through curtains or clothing. 

Despite the clashes in Fallujah, U.S. military commanders in Baghdad said the overall situation in Iraq is improving. 

"If you look at the country as a whole, it is stable," said Hahn. However, he said the massive amount of arms and ammunition being uncovered daily across Iraq posed a major problem. 

"The entire country is almost like an ammunitions and weapons dump. And they've placed them in places you would not expect," he said. "There are weapons here from every country in the world that makes weapons." 

In the northern city of Mosul, 153 arms caches had already been found, one containing 1.2 million mortar rounds and 65,000 artillery shells. Some 150 arms and ammunition sites have been discovered in Baghdad, officials said. 

In a radio broadcast Thursday, the commander of U.S. ground forces in Iraq urged citizens to help move the country forward by going back to work, stopping looting and cooperating to improve postwar security. 

Lt. Gen. David McKiernan made the statement through Information Radio, the U.S.-led coalition's station, which is being broadcast across Iraq. 

"I call for putting an end to all acts of sabotage and criminal acts including plundering, looting and attacking coalition forces," he said in remarks read by an announcer in Arabic. 

Information Radio has been running frequent announcements exhorting Iraqis to accept U.S. forces, and warning any foreign fighters in Iraq to leave or face arrest. 

McKiernan also said that any checkpoints not supervised by coalition forces are unauthorized. 

In other developments: 

-A government official in Jordan said customs officers searching travelers leaving Iraq have confiscated dozens of artworks and archaeological items that may have been stolen from the National Museum in Baghdad and Saddam's palaces. 

-Britain will establish its first diplomatic presence in Iraq for 12 years when a team of officials travels to Baghdad this weekend, Foreign Secretary Jack Straw said Thursday. The four-member diplomatic mission will set up an office to prepare for reopening an embassy once a new government is in place. The British embassy in Baghdad closed on Jan. 12 1991, four days before Operation Desert Storm launched the Gulf War 

-A group of civil engineers were shot at while working in a gas-oil separation plant in southern Iraq's Rumeila oil fields, according to the U.S. Central Command. No injuries were reported; Central Command did not give the nationality of the engineers or any details about the assailants.