US forces say they have killed 30 people in an air strike in Sadr City, a poor Shia district of Baghdad, describing those killed as militants linked to Iran.
Hospital sources said at least 13 people were killed in Wednesday's attack.
An official at Sadr City hospital said it had received 10 bodies, while Imam Ali Hospital had taken in three.
The US military said: "Iraqi and coalition forces killed 30 special groups cell terrorists and detained 12 suspected terrorists during operations Wednesday in Sadr City."
Vehicles have been banned from the city's streets for the day as Shia pilgrims mark the death of Imam Musa Kadhim.
The raid was carried out as Iraqi and US soldiers were searching for members of a network that American commanders accuse of bringing weapons and explosives in from Iran, and sending fighters from Iraq to Iran for training.
The US military said: "During the course of the operation, the assault force and the overhead aerial support observed a vehicle and large group of armed men on foot attempting an assault on the ground forces.
"Responding appropriately to the threat of the organised terrorist force, close air support was called and engaged the terrorist vehicle and organised terrorist force, killing an estimated 30 terrorists."
Earlier, on Tuesday, the US military announced the deaths of four more US soldiers in Iraq, raising the US death toll for the first six days of the month to 21.
A British serviceman has also been killed in southern Iraq, the ministry of defence said on Wednesday.
Driving ban
Thousands of pilgrims gathered in Baghdad, taking to the streets under heavy security in an annual religious gathering.
The government had banned all traffic from dawn to guard against car bombings that routinely target Shia crowds, particularly at religious events.
Brigadier-General Qassim Atta said: "The leadership of the Baghdad security plan decided to impose the vehicle curfew from Wednesday morning, instead of the evening (as previously announced) until Saturday morning."