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Abu Musab al-Zarqawi, the Al Qaeda in Iraq leader who led a brutal insurgency that included homicide bombings, kidnappings and beheadings, was killed in an airstrike on a building north of Baghdad, U.S. and Iraqi officials announced Thursday.

Officials said the terror leader's identity was confirmed by fingerprints, facial recognition and known scars.

Iraqi Prime Minister Nouri Al-Maliki said Zarqawi was killed along with his spiritual consultant Abu Abdul-Rahman al-Iraqi and four other people Wednesday evening at around 6:15 p.m. local time in a bombing raid on a building in a remote area 30 miles northeast of Baghdad in Diyala province.

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Loud applause broke out at a press conference in Baghdad as Al-Maliki, flanked by U.S. Ambassador Zalmay Khalilzad and U.S. Gen. George Casey, the top commander in Iraq, announced that "Zarqawi was terminated."

U.S. President George W. Bush said Zarqawi's death "is a severe blow to Al Qaeda and it is a significant victory in the war on terror."

"We have tough days ahead of us in Iraq that will require the continuing patience of the American people," he said in an address from the White House.

In London, British Prime Minister Tony Blair called Zarqawi's death "a strike against Al Qaeda in Iraq and therefore a strike against Al Qaeda everywhere," but added that there were no illusions that the insurgency in Iraq would immediately crumble.

"We know that they will continue to kill, we know that there are many, many obstacles to overcome," he said at his monthly news conference.

In a statement posted on the Web, Al Qaeda in Iraq confirmed the death of Zarqawi and vowed to continue its "holy war."

"We want to give you the joyous news of the martyrdom of the mujahed sheik Abu Musab al-Zarqawi," said the statement.

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Zarqawi's death came just six days after an audiotape was posted on the Internet, in which the Jordanian-born terrorist leader called on Sunnis to battle Shiites in Iraq.

At a press conference in Baghdad, Maj. Gen. William Caldwell showed a photograph of Zarqawi's body and video of U.S. F-16's dropping two 500-pound bombs on the house near Baqouba.

"The days of Zarqawi are over," Gen. Caldwell said. "Iraqis can take great pride in this achievement."

Gen. Caldwell said there was "100 percent confirmation" that Zarqawi was in the house prior to the attack. He added that six other people were killed in the attack, including one woman and one child.

Video from the scene of the attack showed children playing among mounds of cinderblocks and concrete that had clearly been a structure at one point. Parts of the roof of the building appeared intact lying on top of the rubble as if the walls of the building had merely collapsed under the impact of the bombs.

Secretary of Defense Donald Rumsfeld said the killing of Zarqawi was "enormously important" for the fight against terror in Iraq and around the world.

"Let there be no doubt the fact that he is dead is a significant victory in the battle against terrorism in that country and I would say worldwide," Rumsfeld said from Brussels where he was attending a NATO meeting.

Zarqawi himself is believed to have wielded the knife in the beheadings of two of the Americans — Nicholas Berg and Eugene Armstrong — and earned himself the title of "the slaughtering sheik" among his supporters.

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A Jordanian official said that Jordan also provided the U.S. military with information that helped in tracking Zarqawi down. The official, who spoke on condition of anonymity because he was addressing intelligence issues, would not elaborate, but Jordan is known to have intelligence agents operating in Iraq to hunt down Islamic militants.

Some of the information came from Jordan's sources inside Iraq and led the U.S. military to the area of Baqouba, the official said.

Gen. Caldwell said U.S. and Iraqi intelligence found Zarqawi by following his spiritual adviser Abu Abdul-Rahman al-Iraqi who was identified weeks ago with the help of "somebody inside the al-Zarqawi network."

Baqouba has in recent weeks seen a spike in sectarian violence, including the discovery of 17 severed heads in fruit boxes. It was also near the site of a sectarian atrocity last week in which masked gunmen killed 21 Shiites, including a dozen students, after separating out four Sunni Arabs.

"Those who disrupt the course of life, like Zarqawi, will have a tragic end," al-Maliki said. He also warned those who would follow the militant's lead that "whenever there is a new Zarqawi, we will kill him."

"This is a message for all those who embrace violence, killing and destruction to stop and to (retreat) before it's too late," he said. "It is an open battle with all those who incite sectarianism."

Khalilzad added that "the death of Abu Musab Zarqawi is a huge success for Iraq and the international war on terror." He also gave a thumbs up and said it was a good day for America.

Zarqawi became Iraq's most wanted militant — as notorious as Usama bin Laden, to whom he swore allegiance in 2004. The United States put a $25 million bounty on Zarqawi, the same as bin Laden.

U.S. forces in Iraq said the killing was a major victory.

"We killed him, and it's always great when you can remove someone that has caused this much harm," said Maj. Frank Garcia, public affairs officer for the 2nd Brigade Combat Team, 101st Airborne Division. "We're one step closer to providing stability to the region."

Ret. Air Force Lt. Gen. Tom McInerney told FOX News that "this is better than good news … it will reverberate through that whole region. It means the moderates are starting to win and the extremists are being taken out because the moderates are giving us intelligence we didn't have before."

Iraqis had mixed reactions.

Thamir Abdulhussein, a college student in Baghdad, said he hopes the killing of Zarqawi will promote reconciliation between Iraq's fractured ethnic and sectarian groups.

"If it's true Zarqawi was killed, that will be a big happiness for all the Iraqis," he said. "He was behind all the killings of Sunni and Shiites. Iraqis should now move toward reconciliation. They should stop the violence."

Amir Muhammed Ali, a 45-year-old stock broker in Baghdad, was skeptical that Zarqawi's death would end the unrelenting violence in the country, saying he was a foreigner but the Iraqi resistance to U.S.-led forces would likely continue.

"He didn't represent the resistance, someone will replace him and the operations will go on," he said.

In the past year, he moved his campaign beyond Iraq's borders, claiming to have carried out a Nov. 9, 2005, triple suicide bombing against hotels in Amman, Jordan, that killed 60 people, as well as other attacks in Jordan and even a rocket attack from Lebanon into northern Israel.

U.S. forces and their allies came close to capturing Zarqawi several times since his campaign began in mid-2003.

His closest brush may have come in late 2004. Deputy Interior Ministry Maj. Gen. Hussein Kamal said Iraqi security forces caught Zarqawi near the insurgent stronghold of Fallujah but then released him because they didn't realize who he was.

In May 2005, Web statements by his group said Zarqawi had been wounded in fighting with Americans and was being treated in a hospital abroad — raising speculation over a successor among his lieutenants. But days later, a statement said Zarqawi was fine and had returned to Iraq. There was never any independent confirmation of the reports of his wounding.

U.S. forces believe they just missed capturing Zarqawi in a Feb. 20, 2005 raid in which troops closed in on his vehicle west of Baghdad near the Euphrates River. His driver and another associate were captured and Zarqawi's computer was seized along with pistols and ammunition.

U.S. troops twice launched massive invasions of Fallujah, the stronghold used by Al Qaeda in Iraq fighters and other insurgents west of Baghdad. An April 2004 offensive left the city still in insurgent hands, but the October 2004 assault wrested it from them. However, Zarqawi — if he was in the city — escaped.

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The Associated Press contributed to this report.