A witness told Aljazeera that there were intense explosions in Sadr City late on Monday night.
The impoverished slum area is known for its strong ties to Shia leader Muqtada al-Sadr.
Further south, al-Mahdi Army positions around the Imam Ali mosque in Najaf came under repeated attacks by AC-130 warplanes.
At least eight blasts were heard in the city as an AC-130 was heard circling above.
Aljazeera reported the shrine might have sustained considerable damage in the latest aerial assault.
It is unclear whether a US missile
caused damage to the shrine
The attacks mark the third consecutive night US occupation forces have resorted to the overwhelming firepower of the AC-130 aircraft.
Earlier on Monday, al-Sadr spokesman Aws al-Khafaji said a US missile caused some damage on the outer wall of the shrine.
A US military spokesman denied that his forces caused the damage, but it could not be independently confirmed.
Al-Sadr's unarmed supporters are still lodged inside the Imam Ali shrine while al-Mahdi Army militia retain control of the alleys and streets leading to it.