(CBS/AP) Baghdad's streets were electric with tension Wednesday as U.S. officials confirmed the new security operation was under way. U.S. armor rushed through streets and Iraqi armored personnel carriers guarded bridges and major intersections.

New coils of barbed-wire and blast barriers marked checkpoints that caused traffic bottlenecks. U.S. Apache helicopters were in the air over parts of the city where they hadn't been seen before. Gunfire still rang out across the city and some residents said they doubted life would get better.

"Nothing will work. It's too late," said Hashem al-Moussawi, a resident of the Sadr City Shiite enclave who was badly wounded in a bombing in December.

Underlining the dangers ahead, a Sea Knight helicopter was shot down Wednesday northwest of Baghdad, killing all seven people on board, the U.S. military said. It's the fifth helicopter to go down in Iraq in just over two weeks.

CBS News has learned that the transport helicopter was shot down during what the military called "routine operations."

But before the U.S. could announce the cause of the crash, a jihadi Web site linked to al Qaeda was already declaring victory, reports chief foreign correspondent Lara Logan.

The Web site said, "The Air Defense Division of the Islamic State of Iraq has succeeded in shooting down and completely burning a Chinook helicopter."

"The helicopter was flying and passed over us, then we heard the firing of a missile," said Mohammad al-Janabi, a farmer who was speaking less than half a mile from the wreckage. "The helicopter then turned into a ball of fire. It flew in a circle twice, then it went down."

In other developments:

Three Army Reserve officers and a U.S. contractor were indicted Wednesday as part of a bid-rigging scam that steered millions of dollars of Iraq reconstruction projects to a contractor in exchange for cash, luxury cars, jewelry and other pricey goods.

Defense Secretary Robert Gates told a House panel Wednesday that the U.S. should know in a few months if the Iraqi government is making progress toward peace and whether the United States "is going to have to look at other alternatives and consequences."

With tears and sobs, former Iraqi leader Saddam Hussein's elder daughter joined hundreds of Baathists in the Yemeni capital on Wednesday to mark the passage of 40 days of mourning his death. Raghad Hussein, accompanied by her son and daughter and several of Saddam's defense lawyers, was greeted with chants of "Revenge for Saddam!" and "Eternity to Saddam!" on arrival at the San'a airport.

A judge Wednesday ordered a U.S. soldier to stand trial in absentia for the fatal shooting of an Italian intelligence agent at a checkpoint in Baghdad. Spc. Mario Lozano is indicted for murder and attempted murder in the death of Nicola Calipari, who was shot on March 4, 2005, on his way to the Baghdad airport shortly after securing the release of an Italian journalist who had been kidnapped in the Iraqi capital, prosecutor Pietro Saviotti said.

At checkpoints that seemed to have been thrown up overnight, some of them blocking half the lanes of traffic on wide streets, Iraqi police and army soldiers searched cars at random. Drivers and passengers had to get out and show identity papers.

Adding to the tension, Iraqi Army and police convoys fired rounds into the air above motorists, warning them to make way for the passing forces. The security troops drove over traffic medians and into incoming traffic.

In a sign of just how dangerous the security mission will be, a three-vehicle western security company convoy came under fire near Haifa Street, a Sunni insurgent stronghold just north of the Green Zone.

The security men in the armored cars returned fire and quickly exploded green and white smoke bombs for concealment. Minutes later, they sped away, with the bodyguards in the convoy pelting surrounding autos with water bottles to make them clear the way.

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© MMVII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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