Kelly, also a former editor of The New Republic as well as The Atlantic Monthly, died Thursday night while traveling with the U.S. Army's 3rd Infantry Division as it moved across Iraq, according to a statement issued by Atlantic Media.
President Bush "expresses his sorrow and his condolences to the Kelly family," White House press secretary Ari Fleischer said.
Atlantic Monthly owner David Bradley said the magazine "has had 145 years of good times and bad, but no moment more deeply sad than this one now."
The 46-year-old Kelly, who also covered the first Gulf War, is the fifth journalist to die in the war and the first among the 600 embedded with U.S. armed forces.
Atlantic Media provided no details about Kelly's death. The Washington Post, on its Web site, said Kelly was killed in a Humvee accident.
Navy Lt. Herlinda Rojas, a spokeswoman at the Coalition Press Information Center in Kuwait City, said a soldier and a reporter were killed near Baghdad when a Humvee went into a canal. Neither were identified by Rojas. Military officials said they believed it was an accident and not the result of combat.
Last month, Kelly told ABC News that he did not consider his Iraq assignment overly dangerous. "There is some element of danger," he said, "but you're surrounded by an Army, literally, who is going to try very hard to keep you out of danger."
Kelly's final column for the Post was published Thursday. In it, he wrote about accompanying an Army task force as it captured a bridge across the Euphrates River.
"On the western side of the bridge, Lt. Col. Ernest `Rock' Marcone, commander of Task Force 3-69, stood in the sand by the side of the road, smoking a cigar and drinking a cup of coffee," Kelly wrote. "Marcone's soldiers say he deeply likes to win, and he seemed quietly happy. ... `We now hold the critical ground through which the rest of the division can pass and engage and destroy the Republican Guard,"' Marcone said.
A native of Washington, D.C., Kelly was the son of two journalists — Thomas Kelly, a former reporter, and Marguerite Kelly, who writes the syndicated column, "Family Almanac."
Kelly was fired as editor of The New Republic, a weekly political journal, in 1997 by owner Martin Peretz, a friend and former teacher of then-Vice President Al Gore. Peretz objected to what he felt was the magazine's constant criticism of the Clinton administration, especially in Kelly's regular column.
Kelly became a columnist for the Post and continued to criticize Clinton. Around the same time, he was hired as the editor of National Journal, a weekly magazine that covers the federal government. When the Journal's owner, David Bradley, bought The Atlantic Monthly in 1999, he named Kelly editor of the venerable magazine.
Kelly was widely credited with revitalizing the magazine, which won three National Magazine Awards last year under his watch.
Last September, Kelly stepped down from that post and took the title editor-at-large. He is also chief editorial adviser to the Journal.
Before taking the helm of The New Republic, Kelly was a reporter for The New York Times and a writer and editor at The New Yorker.
He covered the first Gulf War as a stringer for The Boston Globe, GQ and The New Republic, as well as the Iraq-Kurdish conflict that followed it. He won a National Magazine Award and an Overseas Press Club award for his articles. He also wrote a book based on his reporting, "Martyr's Day: Chronicle of a Small War" that won the PEN-Martha Albrand award.
Kelly is survived by his wife, Madelyn, a former producer for CBS News, and two sons, Tom, 6, and Jack, 3.