Two civilians were killed on Wednesday afternoon in Karbala, reported Aljazeera's correspondent. US helicopters were seen circling Karbala.
Earlier, the two sides clashed near one of Shia Muslims' holiest sites, leaving four Iraqis dead and nine wounded according to hospital sources.
It was unclear whether those killed were civilians or fighters.
The fighting came as US tanks advanced near the shrine of al-Husayn, where occupation troops are facing fierce battles with al-Sadr's al-Mahdi army.
Witnesses said US planes launched air strikes at the fringes of the city as tanks drew within 50 metres of the shrine.
Fierce battles have raged in Karbala for weeks. Many residents have fled the embattled city, leaving behind heavily damaged homes and streets, reported Aljazeera's correspondent Yusuf al-Shuli.
In a sign of unity, Sunni and Shia Iraqis sent medical supplies to the city, said al-Shuli. Many civilians who have opted to remain in the city are fearful of more attacks, he added.
US occupation authorities have demanded al-Sadr should turn himself in and end his uprising which has stretched US forces weeks before a scheduled "transfer of sovereignty" to Iraqis.
Occupation officials say al-Sadr is wanted for the killing of a rival cleric.
In related developments, a US marine was killed in al-Anbar province on Tuesday, said the occupying authorities on Wednesday. The statement gave no further details.