Bomb kills 10 at Baghdad council meeting

(Repeats with new headline)

* Bomb at Sadr City council meeting kills 10

* 2 U.S. government employees, 2 U.S. soldiers among dead

* U.S. military blames rogue elements of Mehdi Army

By Dean Yates

BAGHDAD, June 24 (Reuters) - A bomb killed 10 people including two U.S. government employees and two U.S. soldiers at a council meeting in the Baghdad stronghold of Iraqi Shi'ite cleric Moqtada al-Sadr on Tuesday, officials said.

Police said six Iraqis were killed and 10 wounded.

The U.S. military blamed renegade Shi'ite militias called "special groups" for the attack. That is jargon for rogue elements of Sadr's Mehdi Army militia that the military says are equipped, trained and funded by Iran. Tehran denies the charges.

A U.S. embassy spokeswoman said one of the dead American civilians worked for the U.S. State Department and the other for the Department of Defense. She had no further details.

Iraqi police said the blast was caused by a suicide bomber. But the U.S. military said a suspect who had tested positive for explosives residue had been caught trying to flee the scene. That suggests a bomb was planted in the building.

Mahmud al-Zamili, a member of Sadr City's local council, said the blast occurred inside the office of the deputy head of the council. Police said the deputy was among the wounded.

A Reuters photographer said U.S. and Iraqi forces had cordoned off the council offices in Sadr City, bastion of Sadr's Mehdi Army militia, where battles between gunmen and security forces raged for weeks until a truce took effect in May.

Scores of Americans work closely with local authorities across Iraq in an effort to improve governance and restore essential services following five years of war.

Those efforts have picked up in the past year as violence has dropped dramatically. U.S. forces are involved in the programmes, and also regularly visit local officials as part of their routine patrols.

Senior Iraqi officials have stressed it is vital to quickly restore government services in the Shi'ite slum of Sadr City now that fighting has ended, to give residents an alternative means of support besides the Sadrist movement, which dispenses food and other supplies.

There has been little central government control over Sadr City for years. Some two million people live in the area.

Tuesday's bombing came a day after a gunman killed two U.S. soldiers and wounded three others as they left a council building southeast of Baghdad.

In that incident, Iraqi security officials said a local official in the town of Madaen turned his gun on U.S. soldiers who had gone to visit him.

The U.S. military said the soldiers had just attended a council meeting in the town when they were ambushed. The identity of the attacker was unclear, the military said. (Additional reporting by Wisam Mohammed, Editing by Catherine Evans)