A senior US military official confirmed the death toll after the raid on the post near the town of Mahmudiya.
Local residents indicated that the guards were attacked at a checkpoint set up near Latifiya, eight kilometres south of the main town.
One survivor, Ismail Hussein, described how they had been taken by surprise and said the attack was so quick he was unable to recall what weapons had been used.
"This region, Latifiya is becoming more dangerous than Falluja," a national guard chief told AFP, noting that another of his men was killed a week ago in a clash with rebels.
The deaths followed a morning raid on an oil pipeline feeding Iraq's southern export terminals.
An oil official says saboteurs attacked one of two oil pipelines feeding the terminals.
"Fire is raging in the 42-inch pipeline on the Faw Peninsula. It was sabotage," the official said.
British military and Iraqi oil officials say the "breached" pipeline has caused a fresh fall in exports.
An official at the terminal serving the southern oilfields said exports had fallen to 40,000 barrels per hour from 84,000 barrels.
Iraq's oil exports have regularly been
cut after insurgent attacks
Disruption of Iraq's oil exports has an immediate impact on the country's earnings and stability. During the UN embargo Iraq was able to export a monitored quantity of oil under the UN's Oil for Food programme.
Iraq ranks second only to Saudi Arabia for its oil resources, and was the world’s second largest oil exporter before the Iraq-Iran war broke out in 1980.
There is no word yet on who may have carried out Saturday's attack.
In other incidents, one British soldier was wounded in a blast targeting a British military convoy in the main southern Iraqi city of Basra on Saturday, a spokesman said.
"At nine o'clock this morning (0500 GMT), there was an IED (improvised explosive device) attack against a British convoy. One person was injured," Captain Donald Francis said by telephone from the city.
Francis added that two vehicles were slightly damaged in the attack.
The Deutsche Press-Agentur also reported that five Iraqi civilians were killed and three more wounded when a US tank fired on their house in Khalidiya, 75kms north of Baghdad.
The father of one victim said the men were targeted without provocation or prior warning, but the report has yet to be confirmed.