The missile attack, which also killed a Palestinian journalist, followed fierce clashes which began when US military vehicles, firing stun grenades, entered Haifa street in the centre of the capital at about 2am (1100 GMT) on Sunday, an Iraqi journalist told Aljazeera.
A US armoured vehicle was set ablaze and as a group of Iraqi men gathered around the burning vehicle, US helicopters swooped in and fired machine guns and missiles at the crowd, killing up to 10 Iraqis and injuring 35 others.
Twenty-eight year old Palestinian television journalist, Mazin al-Tumaisi, was also killed and two photographers wounded, when the US missiles struck.
Al-Tumaisi, who worked for Saudi television Akhbariya and as a fixer for the Arab satellite channel al-Arabiya, was killed covering the fighting in Haifa Street, said Al-Arabiya reporter Ahmad Salih.
An Iraqi cameraman working for Reuters and an Iraqi photographer working for Getty Images were also wounded slightly by flying shrapnel, said a source at the London-based news agency.
A US armoured vehicle was set
ablaze in the attack
Several vehicles were also set ablaze and the sound of heavy machine gun fire reverberated for three hours from the vicinity.
US forces withdrew from the area at around 7.30am.
All the casualties were civilians, the journalist said, adding that bodies were left in the street for more than half an hour before an ambulance was able to remove them.
A number of residential buildings were also damaged and US helicopters have continued to hover over the area, opening fire repeatedly, the journalist added.
Meanwhile, more than a dozen explosions shook central Baghdad at dawn on Sunday and thick plumes of smoke rose above the Green Zone compound housing Iraq's interim government, the US embassy and other consulates.
Four Iraqi policemen have died
in an Amiriya car blast
In other unrest, at least two Iraqi Civil Guard officers were killed when armed assailants attacked a convoy bringing foreigners from Baghdad airport to the city centre.
Several vehicles in the convoy caught fire during the attack which occurred on a highway overpass in the Yarmuk neighbourhood.
Three other members of the guard were killed and seven others injured in Jibla city north of Hilla in central Iraq when an explosive device targeting their patrol detonated on Sunday, Aljazeera has learnt.
Abu Ghraib blast
Outside Abu Ghraib prison near Baghdad, a car bomb exploded on Sunday morning, wounding at least three people, the Iraqi Health Ministry said.
According to reports, an internet statement, reportedly signed by the "military branch of the Tauhid wal Jihad" group claimed responsibility for the attacks on the prison and the Green Zone. The group is linked to al-Qaida linked operative Abu Musab al-Zarqawi.
In central Ramadi city, west of Baghdad, seven Iraqis were injured during clashes between US forces and unknown armed men on Sunday morning, Aljazeera has learnt.
Militiamen say they shot down an
unmanned US surveillance plane
The clashes coincided with a mortar bomb attack targeting a US military base west of the city.
Meanwhile, three Iraqi policemen were killed and four others injured after the driver of a vehicle the policemen were pursuing blew himself up.
The explosion took place on a road near the main highway in Amiriya, west of Baghdad.
An Iraqi journalist told Aljazeera Iraqi police explained that as the patrol approached the vehicle, the driver blew himself up.
Elsewhere in the Iraqi city of Falluja, armed fighters claimed to have shot down an unmanned US Marines reconnaisance aircraft.
Unmanned aircraft - also called drones or Remote Piloted Vehicles (RPVs) - are used by the US army to relay video surveillance of enemy positions to commanders.