Captain Hassan Ali of the Iraqi police said the raid killed three people and wounded seven.
However, Adnan Sailawi, an al-Sadr supporter, said eight people were killed and 22 wounded when a British aircraft attacked a group of men outside a Shia prayer hall.
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Major David Gell, a British military spokesman, said that the attacks were believed to be in retaliation for the killing of the senior al-Mahdi army commander in the city on Friday.
"Although attacks of this nature are not uncommon, the intensity of the attacks would suggest that they may have been in direct retaliation to the killing of the terrorist Wissam Abu Qadir by the Iraqi Special Operations Forces yesterday," a statement said.
"Retaliation by armed militia after yesterday's successful operation was not wholly unexpected."
The attacks came shortly after al-Sadr reappeared from a four-month absence to deliver a Friday sermon calling for national reconciliation and the departure of US and British forces.
Rare talks between the US and Iranian ambassadors to Iraq on how to stabilise the country are also scheduled for Monday.
'Iranian proxy' held
The US military said Saturday's raid in Baghdad resulted in the capture of a man "suspected of ... acting as a proxy for an Iranian Revolutionary Guards Corps officer" and smuggling sophisticated explosive devices to local fighters.
The five men were killed when an air strike hit a column of nine vehicles that were positioning themselves to ambush US and Iraqi troops, the military said in a statement.
However, residents and police rejected the US account saying the cars had been hit while they were queuing at a petrol station.
A military official said several houses were destroyed and six vehicles incinerated, in the raid.
More US deaths
Eight more US soldiers have been killed in five previously unreported attacks in different areas of Iraq over the past four days, the US military said on Saturday.
|Residents of Sadr City said US forces hit a |
queue of cars waiting to buy petrol [AFP]
In the worst of the latest attacks, three soldiers were killed and another two were wounded when their patrol was hit by an explosion in Salahaddin province, north of Baghdad, on Saturday.
Another two soldiers were killed and three were wounded by a roadside bomb east of Baghdad, the military said.
In other attacks, one soldier was killed and two were wounded by a roadside bomb in southern Baghdad on Saturday.
Another soldier was killed and three more were wounded in Taji, 20km north of Baghdad, on Friday, the military said.
A US marine was also killed in western province of Anbar on Saturday.
In other news, Iraq's prime minister and two top US officials flew to Anbar in a rare joint outing to highlight gains there in the war against Sunni fighters.
Nuri al-Maliki; Ryan Crocker, the US ambassador; and General David Petraeus, the US commander in Iraq, had planned to travel on Saturday to Qaim, a town on the Syrian border, to meet tribal leaders and survey a $20m border terminal under construction there.
But low visibility prevented their aircraft from completing the trip, and they could only reach the Asad Air Base .
Al-Maliki, accompanied by several of his cabinet ministers, met the Anbar governor and police and army chiefs for security talks.
Crocker and Petraeus received a briefing from local US commanders, and praised the efforts to reduce violence.