Iraqi Troops Battle Shiite Militiamen In Southern City

"These people were unfortunately in the wrong place at the wrong time," Johnson said. He added that there would be a review to determine whether a further investigation into the soldiers' actions is warranted.

The violence comes amid assertions by the Iraqi government and the U.S. military that they are clamping down on lawlessness and prevailing over extremists fueling the sectarian unrest gripping the capital.

Over the past week, attacks in Baghdad province averaged about 23 a day, lower than the monthly average for July, Maj. Gen. William B. Caldwell, a U.S. military spokesman, told reporters Monday. Baghdad's average daily homicide rate also dropped 46 percent from July to August, he added.

Roadside bombs, too, decreased by 50 percent last week to a total of eight, making for the lowest monthly average in nearly eight months, he said. However that figure dramatically changed with the spike in roadside bombs over the weekend, he added.

Despite the recent sharp rise in violence, Caldwell said that "the operation is moving along as anticipated" to quell violence in Baghdad.

"It was always expected that there would be this extremist element that would get out and try to discredit the operations that are ongoing by striking at areas where civilians are readily available, where they can inflict some casualties," Caldwell said. "We'll continue to make every diligent effort to preclude that from happening."

The southern part of Iraq could emerge as the biggest challenge for U.S. and Iraqi forces, potentially rivaling the sectarian chaos in Baghdad. Upon taking office, Iraqi Prime Minister Nouri al-Maliki vowed to eradicate the host of militias and death squads operating in the country. But 100 days after his coalition government was sworn into power, the militias, especially the Mahdi Army, remain key players in a struggle for power from Baghdad to the southern city of Basra.

Monday's clashes in Diwaniyah underscored the militias' growing influence. Tensions were already high. Three days earlier, the Iraqi army had arrested three prominent supporters of Sadr, said Abdul Razak al-Nadawi, the head of the cleric's office in Diwaniyah.

"They did this without any warrants," Nadawi said in an interview. "Usually, people are arrested by the police. But it was the Iraqi army who arrested them."

Soon after the arrests, Mahdi Army militiamen flooded the streets, clutching guns and engaging in minor clashes with police, said Kareem al-Musawi, 33, a resident.

"Then all the police withdrew from the streets," he said. "Then the armed men covered every street in the city."

Monday's clashes erupted after Iraqi soldiers, backed by Polish troops, attempted to raid three neighborhoods controlled by the Mahdi Army. The fighting began after midnight as explosions and gunfire rattled different parts of the city, residents said. As many as 26 mosques in Diwaniyah were damaged by Mahdi Army mortar attacks, the Iraqi army said in a statement. Shops, markets and government offices shut down, and frightened residents stayed inside their houses.