BAGHDAD (Reuters) - Bomb attacks in Baghdad have hit an all-time high, the U.S. military said on Wednesday, as one of the capital's frontline police units was pulled off the streets on suspicion of involvement with sectarian death squads.

Thousands of police face criminal vetting and lie detectors as part of a "retraining" process designed to weed out militia killers who have used the cover of their uniforms to kidnap, torture and commit mass murder, U.S. officials have said.

The overnight orders to move the 8th National Police Brigade into barracks and arrest one of its commanders came a day after Prime Minister Nuri al-Maliki unveiled a sketchy deal with Sunni leaders and fellow Shi'ites to try to stem violence. But there was still no sign of further talks to provide substance.

U.S. military spokesman Major General William Caldwell said the number of car bombs in Baghdad, both detonated and defused, hit their highest level of the year last week and that bombs reported in general were "also at an all-time high."

U.S. and Iraqi forces have mounted a major military operation in the past two months against militants in Baghdad.

For the second time in two days, four U.S. soldiers were killed in a single incident around Baghdad, this time in what appears to have been a substantial skirmish involving mortars or rockets and gunfire to the northwest. It took the death toll in four days of the month to 15 around Baghdad and 22 in total.

Caldwell described it as a "hard week" for U.S. forces, who typically suffer two to three deaths a day on average in        Iraq.

Fourteen people were killed and 75 wounded when a car bomb struck a government motorcade in Baghdad. Police said the industry minister, a Kurd, was in the motorcade but aides said no senior officials were in the convoy.

The blast in the Christian Karrada commercial area damaged buildings and left blood and mangled cars in the street.

DEATH SQUADS

Under pressure before congressional elections next month from voters keen for an exit strategy from Iraq,        President Bush has made the training of Iraqi security forces the focus of hopes to start withdrawing 140,000 U.S. troops.

The same sectarian divisions driving hundreds of killings a week in the capital are also present among the 300,000 Iraqi soldiers and especially the police, U.S. officials say.

"There is clear evidence that there was some complicity in allowing death squad elements to move freely," Caldwell said of the decision to stand down the 8th Brigade -- some 700 to 800 men -- after U.S. officers reviewed all 27 brigades last month.

"The determination was made that removing them from Baghdad will be in fact enhancing the overall security," he said.

Leaders of the once dominant Sunni Arab minority view parts of the largely Shi'ite national police force, built up last year to help fight Sunni insurgents, as fronts for Shi'ite militias.

"The individuals ... had not in fact put their full allegiance and commitment behind the government in Iraq and instead had maintained it to some other elements outside of the national police," Caldwell said.

All police brigades will be retrained over the coming year.

One U.S. military official described some national police last week as "absolute ... remnants of humanity" while another, conceding the U.S. role in recruiting them, said he found it "frightening" meeting some of the men drafted in from mainly Shi'ite communities to help protect January 2005 elections.

At that time, the main threat was seen as coming from Sunnis loyal to al Qaeda and        Saddam Hussein. Now killing by all factions pressing their own interests is tearing Iraq apart.

An Interior Ministry spokesman said the 8th Brigade commander arrested on Tuesday was accused of negligence and failing to report the kidnap of 26 meat factory workers in southern Baghdad on Sunday. At least 10 have been found dead.

North of Baghdad, in violent Diyala province, an Iraqi army colonel said U.S. troops arrested 10 Iraqi soldiers suspected of sectarian killings. There was no immediate U.S. comment.

U.S. and Iraqi officials admit privately to doubts about the sectarian and ethnic cohesion of the Iraqi security forces if conflict slides toward all-out cινιℓ ωαr for oil and territory.