A doctor at the al-Sadr City hospital said on Friday that four children required operations. The fighter, loyal to the Shia leader, was killed as he prepared to battle the occupation, said an official of al-Sadr's group.
Al-Sadr City has been the scene of increasing clashes between occupation forces and al-Sadr fighters.
The southern city of Najaf, another battleground for al-Sadr fighters and the occupation, was largely quite on Friday following clashes a day earlier which left five people killed.
But Friday prayers were cancelled after fistfights broke out around the city's most holy shrine.
The trouble started when hundreds of protesters marched toward the Imam Ali Shrine to express support for a peace plan which was threatened by clashes the day before.
Supporters of al-Sadr blocked their way and fights broke out between the two groups. The shrine was evacuated and its doors closed as a security precaution, witnesses said.
Earlier in the capital Baghdad, a car bomb exploded on a highway in the Sayadiya district as a US patrol passed nearby. Two US Humvees were slightly damaged but there was no US confirmation of any casualties.