Fighting raged unabated in and around Najaf on Thursday and early Friday between Muqtada al-Sadr's Mahdi Army militia and US troops who were called in to support Iraqi national guardsmen.
By late evening on Thursday, several buildings were on fire in the holy city, reported Aljazeera's correspondent Uday al-Katib.
Meanwhile in Baghdad, Aljazeera reported that several loud blasts, caused by exploding mortar rounds, were heard in the city centre.
Reuters correspondents said they heard three explosions followed by automatic gunfire near the Sheraton and Palestine hotels.
Plumes of smoke were seen rising from the hotels, which house many journalists and foreign contractors, Reuters reported.
According to Aljazeera's correspondent in Najaf, the clashes started when the Najaf General Hospital was hit by several mortar rounds killing one and wounding four others.
The health ministry said the casualties were all hospital staff.
Al-Mahdi Army militia then moved the fight to the vicinity of the city's cemetary where a US marine helicopter was shot down by small arms fire.
Scores of civilians were killed in
A US Army spokesman said several members of the helicopter crew were wounded, but had been evacuated. The helicopter had been transporting a wounded soldier when it came under small arms fire, the spokesman added.
By nightfall, Aljazeera reported at least 15 Iraqis had been killed and more than 102 wounded in the ongoing clashes.
US forces said one soldier was killed and five others wounded when their convoy came under attack on the outskirts of Najaf cemetary.
Interim Iraqi Interior Minister Falah al-Naqib told reporters that his government would not negotiate with al-Sadr and would persist in fighting and killing members of his militia. Al-Naqib also blamed Arab press for inciting violence in the occupied country.
Never the less, fighting spread southward to Basra as Shaikh Saad al-Basri, an al-Sadr representative in the city, said three of their militiamen were killed in clashes with British forces in the city.
"The clashes erupted near Garma Bridge north of the city and Sadr's supporters damaged three British military vehicles", he added.
However, a spokesperson for British forces denied they had suffered casualties or losses and said only two of al-Sadr's militiamen were killed.
Elsewhere in Iraq's south, five people were killed and 20 others wounded when a car bomb detonated on Thursday morning at a police station in the town of al-Mahawil, 70 kilometers south of Baghdad.
In the capital itself, at least one man was killed and a car destroyed when a mortar round landed on the road linking the al-Adhamiya and al-Mansur neighbourhoods in the western part of the city.
Falluja was the site of clashes
between US and resistance forces
Meanwhile, in the northern town of Balad, Aljazeera's correspondent reported that three Iraqi national guardsmen were wounded when their convoy came under light weapons attack by unidentified armed assailants.
The attack set three of the convoy's vehicles ablaze.
"A US military convoy hit an explosive device that burnt a US military vehicle north of Ishaqi. No information about casualties among US forces were reported," he added.
In Falluja, west of Baghdad, Aljazeera reported that four Iraqis were killed and another five wounded in the Karma district after being shot at by US occupation troops who had been hit by an improvised explosive device.
There was no word on US casualties in Falluja.
Al-Mahdi Army issues warning
In an interview with Aljazeera late on Thursday, Shaikh Aws al-Khafaji, one of al-Sadr's senior aides, said the Mahdi Army would resort to military operations if the siege of Najaf by US forces was not immediately lifted.
He also said the Mahdi Army militia were currently deployed in the southern city of Nasiriya to "prevent the Italian forces from entering the city".
Al-Khafaji denied carrying out any military operations against Iraqi police and added the two had previously agreed on conducting joint patrols to defend Najaf's holy sites and maintain security in the city.