An occupation patrol came under fire in the town of Buhruz near Baquba, some 50km north of Baghdad on Friday, said a military spokesman. Two Iraqi activists were killed.
Baquba has been the scene of frequent clashes between the occupation and resistance.
On Thursday, another patrol came under attack in the same area. There were no US casualties resulting from either attack.
Military officials said seven activists had been killed in the two days of skirmishes, but officials at Baquba General Hospital said five people had died and 15 were injured.
Families are fleeing Buhriz as clashes intensify, reported Aljazeera's correspondent Salah Hasan.
The town's governor said as many as 4,000 people have left the district, he said. Clashes have left major damage to homes, businesses and civilian vehicles.
The governor has called on occupation troops to withdraw from the area but they refused, saying they were conducting a "mission", reported Hasan. The troops refused to disclose the nature of their operation.
Civilians are fleeing the area as
fighting starts to take its toll
The occupation also razed a number of civilian farms.
In southern Iraq, a British occupation base came under attack for the second consecutive night, said British military officials on Friday.
Four mortars were fired at the building in the town of Amara late on Thursday. Iraqi police officials blamed the attack on followers of Shia leader Muqtada al-Sadr.
Brief clashes erupted briefly following the mortar fire but there were no injuries.
Also in the south, three policemen were wounded in an overnight bomb blast in the city of Nasiriyah, said police.
And Lebanese hostage Jamil Dib was released on Friday after being kidnapped earlier this week, said Lebanese government officials.
Dib, a construction worker, is the second Lebanese hostage to be released in Iraq in the last three days. He was abducted with another Lebanese, George Frendo, who is still being held. Lebanese officials refused to say whether a ransom had been paid to release Dib.
Japanese, Korean troops
On the political front, Japan's cabinet decided on Friday that Tokyo should take part in a multinational force in Iraq despite criticism from the opposition that the government had rushed the move, which they argued violated the pacifist constitution.
Japan's deployment in Iraq has
been controversial in Tokyo
The cabinet backed Prime Minister Junichiro Koizumi's plan to maintain the military in Iraq after the handover of power to an interim Iraqi government on 30 June.
The top government spokesman said Japanese troops would stick to their current reconstruction and humanitarian activities and would not engage in combat even after joining the multinational force, whose main aim is to try to maintain peace in Iraq.
But there are concerns that by joining the US-led multinational force, Japanese troops would find themselves involved in combat, which is banned by the constitution.
The United Nations resolution authorising the multinational force says it will be under a unified command, but Japanese officials have said Tokyo will maintain its own chain of command.
Japan enacted a special law last July allowing its military to engage in reconstruction and humanitarian activities in "non-combat" zones within Iraq, and has sent some 550 troops to southern Iraq.
South Korea will send 900 soldiers to the northern Iraqi city of Irbil in early August in the first stage of a troop dispatch, said the Defence Ministry on Friday.
A total of around 3,000 troops will be deployed by the end of the year. Seoul already has 600 military medics and engineers in Nasiriyah.