US and Iraqi forces claim to have killed more than 250 armed men in a battle involving tanks and helicopters on the outskirts of the Shia holy city of Najaf.
The US military said a helicopter has been shot down in the fighting, resulting in the death of two troops on board. An Iraqi military commander said the day-long battle was continuing.
Assad Abu Gilel, the governor of Najaf province, said US and Iraqi troops fought a day-long battle with up to 1000 fighters, including foreign fighters, holed up in orchards on the northern outskirts of the city.
According to one Iraqi political source, hundreds of fighters drawn from both Sunni and Shia communities were still fighting.
A Reuters reporter at the scene, 160km south of Baghdad, saw US tanks and heard blasts after dark and an Iraqi officer said F-16 jets were bombing the area.
Details of the day's fighting were sketchy. An Iraqi army source said some of the dead wore headbands declaring themselves a "Soldier of Heaven".
Abu Gilel said that the authorities had uncovered a plot to kill some Shia clerics on Monday, to coincide with the climax of Ashura, the Shia holy festival.
"There is a conspiracy to kill the clergy on the 10th day of Muharram," Abu Gilel said.
School attack
Earlier on Sunday, five schoolgirls were killed and another 15 injured when a school in Baghdad came under mortar attack.
In Baghdad, at least 15 people were killed in bombings in mainly Shia areas, Iraqi police said. Two car bombs targeting ethnic Kurds killed 16 people in the northern oil city of Kirkuk.
In a videotape sent to Al Jazeera, the Council of Shura al-Mujahideen group said it has destroyed a US tank by a roadside explosive device in the western Iraqi province of Anbar.
In another videotape, the Jaish al-Mujahideen group said that it has destroyed a US military vehicle in the northern Iraqi city of Samarra.
Al Jazeera could not verify the two tapes from independent sources.