The future deployment of British soldiers in central Iraq could be dependent on the outcome of the Fallujah assault, Number 10 has said.

Speaking on Tuesday, the prime minister's spokesman said that he "could not argue" with the conclusion that the continuing campaign to retake the city from insurgents could have an impact on further UK deployments.

The comments came a day after the announcement that a fourth Black Watch soldier has been killed on operations in central Iraq.

Initial reports said a roadside bomb was involved in the incident, which also injured two others.

Downing Street paid tribute to the dead soldiers, and confirmed that the Black Watch would be home by Christmas.

And in the Commons, foreign secretary Jack Straw praised the "extraordinary courage and fortitude" of the Black Watch troops.

Assault continues

Fierce fighting in Fallujah is continuing following Monday's initial forays into the town.

A third of the town was said to have been secured, with US troops entering the central district.

Liberal Democrat foreign affairs spokesman Sir Menzies Campbell told MPs there were doubts about whether the US actions were "proportionate and consistent with international law".

But Straw said the Iraqi interim government was in charge of strategy. "The United States government is repeatedly on record as saying that it subscribes to its obligations in international law," he added.

US talks

With fighting continuing, the violence is set to cast a shadow over talks between Tony Blair and President Bush later this week.

On Tuesday Number 10 repeated the assertion that Blair would be pushing the US leader to prioritise securing a peace deal between Israel and the Palestinians.

The prime minister's spokesman said that a key measure was helping the Palestinian Authority stabilise Gaza when the Israeli's unilaterally withdraw.

"It is very important that the security vacuum is filled quickly and it is therefore very important that we help to do that along with others," he added.

And the Conservatives called for Britain to seek a "substantial plan for reconstruction and job creation to provide hope for the many unemployed and resentful Iraqis who currently are ready recruits to insurgency".

Shadow foreign secretary Michael Ancram also said that a "more accelerated and better-rewarded process of recruiting, training and deploying police and internal security forces" could speed up plans to withdraw foreign troops from Iraq.