The Iraqi military brass band in scarlet trim played smartly, sun glinting off the tuba. Iraqi officers and officials, the American diplomat and the top U.S. commander in Iraq all watched proudly, the American officer at the podium spoke of progress, and the incoming round whistled in, sputtering.

Uninvited, though evidently aware of the time and place of the event, Iraq's insurgents stole the show Tuesday at a ceremony marking the handover of one of Saddam Hussein's U.S.-commandeered palaces, launching a single mortar shell at mid-speech.

American officers and stubbled private security guards piled on U.S. Ambassador Zalmay Khalilzad, shielding America's top civilian in Iraq with their bodies. Dignitaries and some soldiers dived for cover, knocking over chairs, and moved in a scuffling wave toward the safety of the palace's marbled and chandeliered interior. The round plopped down silently and unseen in a sandy field 300 yards away -- a dud.

There were no follow-up rounds and no injuries. But the semi-close call was a message to Americans and Iraqis that 32 months after the U.S. invasion, no place in this country is safe from insurgent attack.

Here in Tikrit, the vulnerable included Khalilzad and U.S. Army Gen. George Casey, on a U.S. military post being turned over to Iraqi forces, with hundreds of Iraqi and American troops in the surrounding area.

U.S. and Iraqi forces sent their own message back: After many moments of confusion, the ceremony resumed, the Iraqi banner was run up the flagpole, and the palace in Hussein's home region was transferred from U.S. to Iraqi control.

"There are people in Iraq out to stop progress, and as you saw here today, they can't," Casey said, his camouflage cap still squarely in place after the scramble.

In another sign of Iraq's dangers, a suicide car bomber targeted a police car in an open market in the northern city of Kirkuk. The blast killed 17 people, including six policemen. And an American military and civilian convoy taking Iraqi reporters to see preparations for next month's national elections hit a roadside bomb outside Baqubah, about 35 miles northeast of Baghdad. There were no injuries.

Tuesday's event in Tikrit marked the transfer of one of the largest, most opulent and, for Hussein, more tasteful of hundreds of palaces and palace complexes he built for himself across Iraq.

Hussein put the compound on a bluff overlooking the Tigris River, here wide, green and palm-lined, in what remains one of the most beautiful spots in Iraq. The compound encompasses more than 1,000 acres, with more than 130 buildings -- including 18 palaces, as well as theaters and ballrooms -- and five lakes.

U.S. troops moved into this and other abandoned Hussein palaces in the first days of the invasion in 2003, finding them ready to house large numbers of troops.

The Tikrit palaces successively served as headquarters for the 4th, 1st and 42nd infantry divisions. Hussein took his last steps as a free man in the area; U.S. forces captured him nearby in December 2003 in what Americans described as a "spider hole.''

Tuesday's transfer was one of several U.S.-to-Iraqi handovers taking place as the United States tries to move toward withdrawal. American forces have turned 24 posts over to Iraqis this year, the U.S. military said Tuesday. More than 100 U.S.-commandeered military facilities eventually will be returned to Iraqis, Khalilzad said.

Plans involving the most prominent such site, the Green Zone in the heart of Baghdad, remain fluid, Khalilzad said. Complaints are rife among Iraqis and their political leaders that the four-square-mile area -- the fortified home of thousands of American civilians and troops -- has been made into the nearly exclusive preserve of foreigners.

Some proposals call for U.S. turf in the Green Zone to eventually shrink to encompass little more than a heavily guarded embassy. Iraqis would turn the rest of the complex into official offices and open the palaces for tours for all Iraqis, Iraqi civilian and military leaders promise.

In Tikrit, Iraqi Lt. Gen. Abdalaziz Rahman Mufti recalled that under Hussein "you could not even turn your head toward the palace complex" without facing punishment.

Yet the 21/2 years since Hussein's fall have brought their own troubles, the Iraqi commander acknowledged: He estimated that he had survived 15 assassination attempts and been wounded eight times. Other Iraqi military officers typically give similar numbers.

Military helicopters ferried the U.S. and Iraqi officials to Tuesday's ceremonies in Tikrit, since roads in most of Iraq outside the Green Zone long ago were deemed too dangerous for American dignitaries.

Leaving the smoke, rubble and grime of Baghdad behind, the travelers swooped across landscapes with women in vivid scarlet, orange or purple dresses laboring in dun fields. Arrival in Tikrit brought blue-tiled minarets, herons in deep green river water, the plains where Hussein built his trenches and artillery emplacements, and the cliffs where he placed his sprawling palaces.

In recent days, the Americans had pulled up their tents, taken down their cubicles and moved to a nearby base, turning security of the compound over to the fledgling Iraqi army, officials said.

The transfer symbolized the aspirations of the Iraqi people, "the first aspiration being the day when all the multinational forces will be able to leave Iraq," Gov. Hamed Hamood Shekti of Salahuddin province told dignitaries.

The second aspiration, Shekti said, "is to convince the court of world opinion that the people of Iraq are able to manage their issues independently."

At the sound of the incoming shell, dozens of Iraqi officers scuttled inside, where they smiled the wide adrenaline grin of the recently imperiled. Numerous other Iraqi and U.S. officers held their ground.

"I knew I wasn't a very good speaker, but I've never actually been shot at," Lt. Col. Mark McKnight, who presided over the ceremony, joked after starting his speech again.

After the brass band dusted itself off, an Iraqi honor guard ran the country's flag up the pole in front of the palace.

"The band played on," a military spokesman, Brig. Gen. Donald Alston, pointed out.

Special correspondent Omar Fekeiki in Baqubah contributed to this report.

A palace complex in Tikrit was being handed over to Iraqis at the ceremony.

Guards escort U.S. Ambassador Zalmay Khalilzad after the mortar attack.