The U.S. military said it had intelligence that supporters of the suspected Al-Qaeda-linked Abu Mus'ab al Zarqawi were using the site to plan attacks. It said that no innocent civilians were reported in the immediate area.
Reuters television pictures showed a crowd of Iraqis digging through the ruins of a destroyed building and rejoicing as they pulled out survivors, including two women and two children.
"Why did they do this?" one man at the scene asked. "We are in front of a house that was attacked at 4:00 this morning, and it was full of children and women. Why did they do this?"
American troops have not entered Al-Falluja since ending a three-week siege of the city in April that left hundreds dead.
U.S. Marines pulled out, handing responsibility for security to an Iraqi force. But that force has collapsed and the city is controlled by anti-U.S. insurgents.
The U.S. military has conceded it is not in control of insurgent strongholds like Al-Falluja and nearby Ramadi, but says it will launch a campaign to retake them ahead of elections in January.
The question of whether some areas might have to be excluded from the elections has put U.S. officials at odds.
Defense Secretary Donald Rumsfeld suggested on 23 September that elections might not be possible in areas under insurgent control. But Deputy Secretary of State Richard Armitage said the next day that elections must be "open to all citizens."
In a message similar to the one he delivered to U.S. officials the previous day, Iraqi Prime Minister Iyad Allawi told the UN General Assembly yesterday that violence will not stop polls going ahead on schedule.
"We are preparing today to hold the democratic elections in January under the timeline set in the provisional law for the state administration and Security Council Resolution 1646," Allawi said. "We are committed to this timeline despite the complexities and difficulties, and we are capable of meeting that deadline thanks to your help."
(compiled from agency reports)