BAGHDAD (AFP) -Iraq's Prime Minister Nuri al-Maliki mended fences with his chief foreign ally, US President George W. Bush, on Saturday, after a fractious week of testy exchanges and diplomatic mis-steps.

The embattled leader talked with Bush by video conference from Baghdad and afterwards reaffirmed the countries' joint vision of building stronger Iraqi security forces to fight for a stable, democratic administration.

Statements issued in Washington and Baghdad announced the creation of a high-level working group to oversee security comprising Iraqi security ministers, the U.S. military commander in Iraq and the U.S. ambassador.

This came after Maliki warned Washington's envoy to Iraq, ambassador Zalmay Khalilzad, that "I consider myself a friend of the United States, but I'm not America's man in Iraq", according to a senior aide.

Meanwhile, violence continued around the war-torn country as U.S. troops battled Al-Qaeda insurgents for control of the central city of Ramadi and scoured Baghdad for a kidnapped American soldier.

Insurgents also captured 11 Iraqi army soldiers at a roadblock on the highway between Baghdad and Kirkuk, Captain Mahmud Abdallah said.

The troops included members of Kirkuk's Kurdish and Turkmen populations, returning home for leave in civilian dress, he added.

Maliki's office said he had won a pledge of more help to build up Iraq's beleaguered security forces during his talk with the US leader.

"We affirmed the commitment of our two countries that Iraq should be a democratic country and our commitment to fight terrorism," the statement said, after a week of troubled relations between the allies.

The two countries notably agreed that the training of Iraq's security forces by the US military should be speeded up, it said.

"We expressed our attachment to our partnership and we will work with all our means to create a stable and democratic Iraq," Maliki's statement said.

Earlier in the week Maliki had reacted angrily to suggestions that he had agreed to follow a US timetable for political reform and the disarmament of illegal militias, revealing tensions in the US-Iraq alliance.

Washington played down the spat, and the US embassy released a statement that the reform plan would be generated by Iraqi leaders with American support. After the talks, White House spokesman Tony Snow said Bush is "very happy, actually, with the way the prime minister is working," and noted that Maliki said "history will record that because of US efforts Iraq is a free country."

"This was a conversation between two leaders who are working very hard and also cooperatively with one another," Snow said of the 50-minute chat.

The US has 142,000 troops in Iraq protecting Maliki's government, fighting a Sunni insurgency driven by supporters of Saddam Hussein's ousted regime and Islamist militants, and training Iraqi security forces.

Bush is under pressure from domestic critics of his war plan and US public opinion to push the Baghdad government for quicker progress towards national reconciliation and the disarmament of Shiite militias.

Meanwhile, thousands of US soldiers were hunting through Baghdad for an American soldier who was kidnapped on Monday after leaving the fortified Green Zone to visit Iraqi relatives.

"Cordon and checkpoint operations will be conducted today and operations to find our missing soldier continue," a US military spokeswoman said.

"This morning we had reports of a total of 12 bodies recovered throughout Baghdad that were victims of sectarian killings," she added. Baghdad is in the grip of a vicious war between Sunni and Shiite death squads.

The US military suspects that the missing soldier, an American of Iraqi descent, is being held by an armed gang and has searched sites in Sadr City, an impoverished east Baghdad suburb and the bastion of radical Shiite cleric Moqtada al-Sadr's Mahdi Army militia.

A car bomb exploded on Saturday in Sadr City's Al-Mudhafar Square, killing one bystander and wounding 11 more, according to medics at Al-Kindi hospital.

And the Abu Dshir neighbourhood in south Baghdad came under a barrage of mortar shells, killing one civilian and wounding between 25 and 35 more, Iraqi security officials said.

Meanwhile, medics in Ramadi said that a family of six had been killed as US and insurgent forces battled for control of the town. The military confirmed there had been heavy fighting on Friday, but had no news on civilian deaths.

The US military also announced that a marine, wounded in western Iraq on Friday, had died, bringing the number of American dead this month to 98.