Fallujah, Iraq ? U.S. Marines warned guerrillas in this violence-wracked city Thursday that they have only days to hand over their heavy weapons or face a possible American attack. So far the insurgents have turned in mainly dud rockets, rusty mortar shells and grenades labeled “inert.”

Lt. Gen. James Conway said the battle could be “costly” if Marines launched a new assault to uproot insurgents from Fallujah, saying foreign fighters in the city have been reinforcing their positions and have no interest in surrendering.

The stark warning came two days after city leaders called on insurgents to hand over their heavy weapons in exchange for a U.S. pledge to hold back on plans to storm Fallujah and allow the return of families that fled the city.

Now Marines have halted the return because of the failure to disarm and the desire to have fewer civilians in the city if fighting resumes. More than a third of Fallujah’s 200,000 residents fled during the fighting that began April 5.

Early Thursday, Marines launched a major assault on the village of Karma, 10 miles northeast of Fallujah, in a second attempt to put down guerrillas there. “The enemy is taking casualties; we are not,” Maj. Gen. James N. Mattis said.

A battle last week in the village killed 100 insurgents, according to Marine commanders.

In Baghdad, masked gunmen shot and killed a South African security contractor working for the U.S.-led occupation administration and severely wounded his translator Thursday, a U.S. spokesman said. The shooting took place near northern Baghdad’s Sunni Muslim neighborhood of Azamiyah, where gunmen have been active.

The violence across Iraq has interrupted some infrastructure repairs and forced giant firms Siemens AG, Bechtel and General Electric to suspend some reconstruction projects, threatening to undermine the critical U.S. goal of rebuilding Iraq.

Cpl. Will McDermott, front, of Phoenix, and other Marines sleep in their fighting holes in Fallujah, Iraq. They rested Thursday as the top Marine general in Iraq warned that U.S. Marines encircling the city plan to storm into town within days if insurgents do not comply with a cease-fire agreement and relinquish their heavy arms.