Intense and deadly skirmishes near the town of Salman Pak, about 65km southeast of Baghdad, continued for several hours on Thursday.
At one point, Salman Pak's main police station was taken over by fighters before the US military sent in helicopter gunships to attack the building.
Police sources said at least 65 officers had been wounded and that 20 of the fighters had been killed.
The fighting was so fierce that police reinforcements were unable to reach many of the wounded or recover the dead left lying in the road.
Just hours earlier, unknown assailants shot nine bullets into a representative of Grand Ayat Allah Ali al-Sistani, the spiritual leader of Iraqi Shia.
But Shaikh Amar al-Hilali survived the assassination attempt, an aide to the Ayat Allah said on Thursday.
Two of al-Sistani's aides were
attacked on Thursday
Al-Sistani's official in the east Baghdad district of Al-Ubaidi, was "hit nine times in the chest and arms", said the aide.
"His driver was also wounded and they are both in hospital in Baghdad." The shaikh was said to be in a stable condition.
In other attacks on Thursday, eight Iraqis were killed. A car bomb in central Baghdad left three civilians dead and a US army spokesman said the blast might have been aimed at a US convoy that passed by shortly before.
He said there were no US casualties but the explosion scattered tangled metal and wreckage across Tahrir Square, a major intersection lined with shops and market stalls.
Two Iraqi civilians were killed by a roadside bomb in the oil city of Kirkuk, 250km north of Baghdad, police said.
Two other Iraqis were killed by a roadside bomb near the market in Baiji in northern Iraq.
Witnesses said an Iraqi army driver was shot dead in Balad, north of Baghdad.
A car bomb in Baghdad killed
at least three civilians
Police also said three officers were wounded during a gun battle with anti-US fighters near the town of Salman Pak, southeast of Baghdad, following a car bombing.
Meanwhile, Iraqi authorities said they would seal the country's borders next week to prevent Shia pilgrims flooding into the country, in the latest emergency measure intended to thwart violence.
The borders will be closed between 17 February and 22 February, in a move a government spokesman said was designed to coincide with the climax of Ashura, a major Shia religious ceremony.
Millions of Shia travel from across the region to holy sites in Iraq for Ashura, a pilgrimage to remember the martyrdom of Imam al-Husain in 680CE.
Shia pilgrims have been told to
arrive in Iraq before 17 February
Bombers attacked pilgrims last year in Baghdad and Karbala, killing at least 171 people.
"During these dates people will flood to Iraq from neighbouring countries because of Ashura, which will make it difficult to ensure the safety of Iraqis and the visitors," said government spokesman Thair al-Naqib.
Al-Naqib said foreign pilgrims should make sure they arrived before the borders closed.