Iraq's second city of Basra last night turned into a bloodbath as civilians mounted the first rebellion against Saddam Hussein's regime.

Saddam loyalists turned their artillery on a crowd which had taken to the streets, with "horrific" horizontal fire aimed at the civilians.

British troops on the outskirts targeted the Iraqi artillery in an attempt to assist the rebellion.

Satellite-guided missiles were also fired from American planes into the tight streets. A 2,000lb J-Dam satellite-guided bomb was dropped on Saddam's Ba'ath Party headquarters.

One unnamed British officer told the BBC: "We have seen a large crowd on the streets. The Iraqis are firing their own artillery at their own people. There will be carnage."

Basra is Iraq's second city, populated mainly by Shi'ite Muslims who have been brutally repressed by Saddam's branch of Sunni Muslims. After the 1991 Gulf War, they rebelled against their leader - a rebellion that was bloodily quashed as it received no international support.

ITN reporter Richard Gaisford, "embedded" with Scots Dragoon Guards just outside Basra, said: "Now it seems they have had the courage to stand up to Saddam Hussein and his regime, and they will be supported by British forces."

British tanks were preparing to enter the city in a bid to stop any further bloodshed, but nightfall intervened.

"If we were to go in in darkness, that is not a good time to be able to identify civilians and distinguish them from people fighting for Saddam," said one British officer with the Desert Rats.

It is not known how many protestors remain on the streets, but it is expected that the Desert Rats will move in at first light today.

Major General Peter Wall, British Chief of Staff at Allied Central Command in Qatar, said the rebellion seemed to be in its infancy, but British troops were "keen to exploit its potential".

He also said that Iraqi soldiers who had already fled the battlefield were being forced to return to fight after "significant threats against their families".

He said: "This is just the sort of encouraging indication we have been looking for."

It was disclosed that J-Dam bombs had been used for the first time in the conflict by US F-18 Super Hornets to hit what were described as military targets hidden inside civilian buildings.

"It is fair to say that the targets that we are engaging will not be conventional military targets. They will not be barracks or proper weapons facilities, and chances are that it could be someone's house," said Captain Johnny Williamson, a 7th Armoured Brigade spokesman.

The unrest in Basra began soon after British troops seized a senior Ba'ath Party official in a daring dawn raid, which left 20 loyalists dead.

The raid, in the town of Zubayr very close to Basra, began when a British Army Warrior was deliberately crashed through the wall of a house. Bullets and rocket propelled grenades flew through the air as the occupants opened fire, but the men of D Company of the Black Watch poured out of their armoured vehicles, letting fly.

Colonel Chris Vernon, a British military spokesman in Kuwait, said of the official's capture: "He was sitting there in his little building thinking great, have a good evening, have a good morning, then whack we're in, whack he's out and 20 of them are gone, just like that."

Shortly after the raid, up to 50 T-55 Iraqi tanks charged out of Basra towards British positions. Helicopter gunships from HMS Ark Royal replied along with laser-guided bombs and armour piercing depleted uranium bullets from the air. Scores of Iraqis were thought to have been killed and 20 tanks destroyed.

Red Cross engineers attempted to restart a water pumping station. They said that 40 per cent of Basra's 1.5 million population was drinking from the river, which has sewage dumped into it.

Elsewhere in Iraq, the Allies' advance on the capital Baghdad was thwarted by an unseasonably vicious sandstorm.

It grounded attack helicopters and stopped some coalition ground units in their tracks as visibility dropped to only a yard or two. A torrential thunderstorm followed, turning the desert into a quagmire in places.

The US Army's 3rd Infantry Division, which is 50 miles south of Baghdad near Karbala, dug in for the night.

Immediately in front of them is "the red zone" - a defensive ring thrown around Baghdad by three divisions of Saddam's elite Republican Guard, comprising more than 30,000 men.

Intelligence sources feared that Saddam was preparing to order the Guard to use chemical weapons to stop the Allies' progress.

26/03/2003