Samarra, Iraq ? Afraid to stray from home, residents buried the dead in their gardens Saturday as U.S. and Iraqi forces battled pockets of resistance in this former insurgent stronghold, where the American military said 125 rebels were killed and 88 captured in two days of fierce fighting.

The American commander declared the operation a successful first step in a major push to wrest key areas from insurgent control before January elections.

Elsewhere the rebels struck back, wounding at least five U.S. soldiers in three separate bomb attacks. In the latest in a string of kidnappings, militants claimed to have abducted and beheaded an Iraqi construction contractor working on a U.S. base.

U.S. and Iraqi commanders said they controlled 70 percent of Samarra after some 5,000 troops — including 2,000 Iraqis and 3,000 Americans — swept into the city early Friday. Iraqi Defense Minister Hazem Shaalan claimed success, telling the Arab television station Al-Arabiya: “It is over in Samarra.”

Maj. Gen. John Batiste, commander of the 1st Infantry Division, said he was “very confident that the future of Samarra is good.”

“This is great news for the people of Samarra, 200,000 people who have been held captive, hostage if you will, by just a couple of hundred thugs,” he told CNN.

Batiste praised the performance of Iraqi troops, saying they “really handled themselves well” as they secured the hospital, a revered shrine and centuries-old minaret.

“They’re getting better- and better-trained, better- and better-equipped. It ought to give us a lot of confidence,” he said.

Building a strong Iraqi force that can take over security from American troops is a cornerstone of the U.S. strategy to restore peace in Iraq. But during April offenses in Fallujah and Najaf, the fledgling Iraqi troops melted away at the first sign of confrontation, either fleeing or joining the insurgents.

Samarra, 60 miles northwest of Baghdad, appeared mostly calm Saturday, but pockets of resistance persisted, with heavy tank shelling and exchanges of machine gun fire erupting in early evening in the northern part of the city.

Batiste said U.S. forces would conduct mopping up operations for at least the next few days before handing over primary responsibility to Iraqi police and National Guard units.