An Italian soldier who was injured in the clashes, died of his wounds on Monday.
A hospital source, Ali Nasir Diwan, said: "Nine Iraqis, some militiamen and some civilians were killed and 14 others injured in clashes in the centre of the city."
He said the clashes were very fierce for some time, lasting for nearly six hours. The situation was calm by morning, but schools and businesses remained closed.
The clashes followed fighting on Sunday during which six Italian soldiers were injured, one seriously, as the occupation troops were forced to temporarily abandon a position on one of the main bridges in the city.
Twenty-eight people were also hurt on Sunday when a shell hit a market in the centre of the city, 375km southeast of Baghdad, where the Italians and the Mahdi Army of Shia leader Muqtada al-Sadr continued to exchange fire.
On Saturday, 13 civilians and journalists were evacuated to the Italian base in al-Nasiriya from the local headquarters of the US-led occupation when the latter came under fire.
Al-Sadr supporters oppose
foreign occupation of Iraq
Al-Nasiriya has been beset by clashes between the occupation forces and al-Sadr's Mahdi Army, since the latter staged an uprising more than a month ago.
In November, 19 Italian paramilitary officers, soldiers and civilians died in the city in a truck-bomb attack that also killed nine Iraqis.
Italy maintains a 3000-strong force in Iraq.
Also on Sunday, at least two fighters loyal to al-Sadr were killed in fresh clashes with US occupation troops in the Iraqi city of Karbala, Aljazeera's correspondent reports.
Earlier, four Iraqi civilians, including two-year old twins were killed after a mortar shell landed on a house near a British military base in the southern city of Basra.
The owner of the house, Adil Ibrahim, lost his wife, mother and his twin daughters. Another three daughters, as well as his sister, were injured.
The blast occurred in Shatt al-Arab district near a British base at Basra airport.