NASIRIYAH, Iraq (AP) - U.S. troops destroyed an empty dye factory in Baghdad and chased attackers who were seen firing mortars, while the death toll from the suicide bombing at an Italian paramilitary base rose to 31. It was the deadliest attack against a U.S. ally since the occupation began.

Italian Defense Minister Antonio Martino blamed the attack on Saddam Hussein loyalists and al-Qaida terrorists.

The suicide bombing in this relatively quiet Shiite Muslim city prompted Portugal to send 128 elite police officers originally slated for Nasiriyah to Basra instead. A Japanese government spokesman indicated Tokyo will likely postpone sending troops to Iraq until sometime next year.

Nevertheless, British Maj. Gen. Graeme Lamb, commander of the multinational division southeast, insisted Thursday that the coalition "won't be deterred" by the attack.

Martino made his comments to Italian state television Thursday after he arrived at the attack site in Nasiriyah, 180 miles southeast of Baghdad.

Italy has "some fairly reliable intelligence information" that the Fedayeen Saddam, the ousted leader's former paramilitary force, was responsible along with "regrouped al-Qaida terrorists," he said.

Hours after the bombing, U.S. forces destroyed a dye factory in southern Baghdad, setting off explosions that reverberated through the capital after nightfall Wednesday.

A Pentagon spokesman said the facility was a "known meeting, planning, storage and rendezvous point for belligerent elements" attacking coalition forces.

A resident, Jasim Naseef, said insurgents had fired 18 mortar shells from an area near the factory the day before.

Also Wednesday, troops in Baghdad spotted attackers firing mortars, a statement from the 1st Armored Division said. The attackers fled in a van, making several stops as they tried to evade pursuing ground troops.

An Apache helicopter gunship discovered the van heading out of the city near the Abu Ghraib suburb and opened fire, killing two people inside, the statement said. Three occupants were wounded and five others were captured.

Troops searching the first place where the van stopped found an 82mm mortar launch tube, the statement said. Searches of the other sites continued.

"What we are targeting are not only the locations they are shooting from but the ones who are actually conducting the shootings and any stores of ammunition we may find," Hertling said.

The missions Wednesday night were part of "Operation Iron Hammer," a new "get tough" policy for confronting insurgents.

The latest violence took place as chief administrator L. Paul Bremer was in Washington for talks with President Bush and his national security advisers on ways to speed up establishing an Iraqi government to take charge in Baghdad.

In Nasiriyah, investigators sifted through the ruins of the three-story building, used as a barracks by the Italian Carabinieri paramilitary police.

Doctor Ali Farhan, head of the city hospital's forensics department, said later that 13 non-Italian bodies, including at least nine Iraqis.

There were conflicting accounts about how many bombers were involved and it was unclear whether they were included in the death toll.

Martino said a truck, followed by an armored car, approached the compound at high speed. Gunmen inside one of the vehicles opened fire at Italian troops guarding the entrance, he said. The guards returned fire, but the vehicle plowed through the gate, and then exploded, he added.

Witnesses, however, said another car ran the checkpoint, distracting the guards who opened fire. The truck with the bomb then raced into the area from the opposite direction, crashed into the gate and exploded.

Mohamed Alwan, 28, lying in hospital with a broken leg and shrapnel wounds, said he had been standing on one side of the perimeter barrier outside the Italian base, waiting to inquire about his application to join an Iraqi defense force.

He said he saw a truck crossing the bridge with two men inside.

"I noticed it because it was speeding up as it headed for the gate of the compound," he said. "There were two men inside, the one next to the driver was bearded and he pulled out a gun and started shooting from the window."

Dozens of soldiers milled around the area Thursday, clearly stunned by the carnage. All the main support frames of the building were broken, and the outer walls blasted away. Mangled remains of about a dozen vehicles littered the area.

Italy has sent about 2,300 troops to help rebuild Iraq. About 340 Carabinieri are based in Nasiriyah, along with 110 Romanians. No Romanians were reported wounded in Wednesday's attack.

It was the 13th vehicle bombing in Iraq since Aug. 7, when a car exploded at the Jordanian Embassy in Baghdad, killing at least 19 people. Wednesday's blast from the estimated 650 pounds of explosives gouged a 6-foot-deep crater and set fire to parked cars. Secondary explosions from stored ammunition shook the area.

Bremer's talks in Washington focused on accelerating efforts for Iraqis to take charge of security, write a constitution, hold elections and assume control over government institutions.

U.S. officials said the administration does not intend to abandon the U.S.-appointed Iraqi Governing Council but was exploring new scenarios. One option called for creating a smaller body within the 25-seat council - perhaps 10 people with expanded roles - or establishing one person as a strong leader, a senior administration official said Wednesday.

Another administration official said an interim Iraqi leader could have authority to govern the country until a constitution was written and elections held.

For months, the Bush administration has been saying Iraq must first have a constitution in place and hold elections before the U.S. would relinquish sovereignty. But disagreements on how to select delegates to a constitutional convention have blocked progress.

Associated Press correspondent Sabah Jerges contributed to this report from Nasiriyah.