Military officials said Thursday that U.S. Marines had killed 25 insurgents and captured 25 more in heavy fighting Wednesday in the western city of Ramadi, and Iraqi police said they had arrested more than 200 people in an overnight raid in Baghdad conducted with U.S. soldiers on a street frequented by criminal gangs and anti-American forces.

Meanwhile, police in the northern town of Baiji said an unidentified decapitated body was found Wednesday night on the banks of the Tigris River. Another decapitated body, found near the same spot last week, has been confirmed as that of Georgi Lazov, 30, a kidnapped Bulgarian truck driver, an official in Bulgaria's capital, Sofia, said Thursday. Lazov and Ivailo Kepov, 32, also a Bulgarian trucker, were taken hostage June 27 near the northern city of Mosul by insurgents who claimed affiliation with Abu Musab Zarqawi, a Jordanian allied with al Qaeda.

Witnesses told the Associated Press that the body found Wednesday was clad in the same type of orange jumpsuit that kidnappers in Iraq have clothed foreign captives. The witnesses said a severed head was found in a bag next to the body.

More than 60 hostages have been taken in recent months in a campaign by insurgents to drive out foreign troops and civilian workers aiding the U.S.-led reconstruction, a trend that has left many foreigners here on edge and leery of straying far from their work sites.

On Wednesday, an Islamic militant group said it had seized civilians from India, Kenya and Egypt and threatened to behead them one by one starting on Saturday unless their countries withdrew all workers from Iraq. All seven hostages -- one more than previously announced by the kidnappers -- are truck drivers for a Kuwaiti company.

The statement came two days after the Philippines complied with demands made by the captors of a Filipino truck driver and withdrew its 51 troops from Iraq a month ahead of schedule. Foreign governments sharply criticized President Gloria Macapagal Arroyo for bowing to the demands, saying it would encourage further kidnappings.

The truck driver, Angelo de la Cruz, a father of eight, was released Wednesday. De la Cruz, wearing a white shirt and baseball cap, arrived home in the Philippines on Thursday, falling into the arms of his weeping father, who met him at the airport with his wife and children.

A spokesman for the Kenyan government, meanwhile, urged its citizens to leave Iraq immediately. An official with the Indian Foreign Ministry said the government was working to secure the release of the three Indian hostages. There was no immediate reaction from the Egyptian government.

The clashes Wednesday in Ramadi, 60 miles west of Baghdad, came after insurgents exploded a roadside bomb near a Marine convoy. In the ensuing series of gun battles, 14 U.S. troops were wounded, but none had a life-threatening injury.

The Marines initially fought about eight to 10 insurgents, according to a Marine statement. That battle grew into one involving as many as 100 insurgents. The Marines called for backup firepower and air support. During the skirmish, the Americans discovered and detonated two more roadside bombs, which insurgents have used to deadly effect against U.S., Iraqi and other security forces. The Marines also confiscated four rocket-propelled grenade launchers, a homemade rocket launcher and two antitank mines, the statement said.

In the capital, a roadside bomb exploded near the Zayuna Bridge on Thursday as a minibus rolled past. Two civilians were killed and two others were seriously wounded, witnesses said.

Fadhil Hussein, 26, a security guard at the Oil Marketing Co., was standing at the company gate when the explosion rocked his post. "I don't know why this happened," Hussein said. "There were no Americans in the street. Those are saboteurs who want to kill even the innocent people and make this country collapse."

On Baghdad's notorious Haifa Street, U.S. military personnel advised shopkeepers on Wednesday afternoon to leave the area. Shortly before sunset, Humvees and other military vehicles began to roll in, and American soldiers sealed off the street, which remained closed until late Thursday morning. Sabah Kadhim, a spokesman for the Iraqi Interior Ministry, said the more than 200 people arrested Thursday were all "suspected of being terrorists or criminals."

In a gun battle between insurgents and Iraqi and U.S. soldiers earlier this month on the same street, two Iraqi National Guardsmen were killed and 10 were wounded.

"This is part of the campaign started three weeks ago to arrest these criminals," Kadhim said

Kadhim said police were conducting similar raids across the country. "Iraqi police in all of Iraq have orders to do these campaigns, but Iraqi police in other provinces don't face the size of the gangs as in Baghdad."

Special correspondents Bassam Sabti and Omar Fekeiki contributed to this report.