Americans admit hand of Saddam may be guiding resistance operations against occupiers

As Congress prepared to ratify $60bn (£35bn) of extra military spending in Iraq, the Bush administration admitted that Saddam Hussein, previously written off as a powerless fugitive, may have a large hand in the growing resistance to the United States-led occupation.

In confirmation of the new thinking, American troops yesterday sealed off Awja, the village 90 miles north of Baghdad where Saddam was born and which is home to several senior figures in the former Baathist regime.

After soldiers had surrounded Awja with razor wire and set up checkpoints at the exits, adults in the village were ordered to register for identity checks and new ID cards. An American officer said the operation was intended "to protect the majority of the population, the people who want to get on with their lives".

The growing view that the former Iraqi leader may be co-ordinating the resistance, which claimed yet another soldier's life yesterday, was first reported by The New York Times yesterday. The revelation is bound to heighten doubts about the success of the invasion, and the ability of the occupation forces to restore stability, especially in the so-called Sunni Triangle to the north and west of the capital, where attacks on troops have been frequent.

Hitherto the US has blamed the post-war violence, in which 118 of its troops have been killed, on either Baathist loyalists or Islamic extremists, or a combination of the two. But this is the first time that Saddam has been personally held responsible. Officials said that meetings with commanders in the field may have been held in vehicles on the move, to avoid discovery by US surveillance.

Whatever the truth, it is clear that despite the killing or capture of 44 of the 55 top members of the former regime portrayed in the Pentagon's celebrated deck of cards of Iraq's most wanted, opposition to the occupation is substantial and growing.

The $60bn of military spending represents the lion's share of the $87bn supplementary package requested by President George Bush for Iraq and Afghanistan, for which Congressional approval is now all but certain. Late on Thursday, the House of Representatives passed a version of the measure agreed with Senate negotiators, deleting the controversial provision that would have turned $10bn of the $20bn earmarked for reconstruction into loans.

The Senate, where unease over the funding package was stronger, was expected to give its approval, possibly as early as yesterday. If so, $160bn will have been allocated to cover the costs of the war and its aftermath - far higher than the $50bn to $100bn originally estimated by the administration.

In a separate challenge to the White House, the Senate Intelligence Committee has written to Condoleezza Rice, Mr Bush's National Security Adviser, demanding that she hand over pre-war intelligence documents on Iraq's alleged stockpiles of banned weapons. Six months of searching has yet to turn up a trace of them.