Iraqi forces launched a mission on Saturday to kill or capture the al Qaeda insurgents who kidnapped 14 policemen, slit their throats and then boasted about it on the Internet.
Meanwhile, in Washington, President George W. Bush's administration sacked the civilian head of the US army in a bid to quell criticism of the treatment of wounded Iraq veterans once they are flown home.
In south of Baghdad, suspected members of another Sunni faction shot dead six men who dared to attend local reconciliation talks between Sunnis and Shiites.
These developments came against the backdrop of massive US and Iraqi security operations in Baghdad and the western city of Ramadi, the epicentre of Iraq's Sunni insurgency, which residents said was under siege.
Interior ministry operations director Brigadier General Abdel Karim Khalaf told AFP that 14 officers missing after their convoy was ambushed on Thursday had been found dead in the streets of Baquba, north of Baghdad.
"The minister is following this case closely and has given the order to hunt these people down and punish them. The police chief in Baquba has collected intelligence information, and the operation is underway," Khalaf said.
Separately, the Iraqi defence ministry announced that it had killed three "terrorists" and arrested nine more in Baquba, but it was not clear whether this was directly related to the hostage murders.
On Thursday evening, around 55 members of the Iraq's Shiite-led interior ministry forces were travelling from Baquba to the nearby town of Khalis to go on leave when they were ambushed by Sunni insurgents. The gang managed to capture 14 of them, Khalaf said.
Shortly afterwards, a coalition of insurgent groups led by al Qaeda said in an internet message that the hostages would be killed to avenge the alleged rape of a Baghdadi Sunni woman by Shiite police.
Late on Friday, a second message said the killings had been carried out and promised that a video of the murders would be released. Uday al-Khadran, the mayor of Khalis, told AFP: "They were found in the streets of Baquba. Their throats had been cut and their hands were bound."