The US military statement said the fighters were from a breakaway faction of the al-Mahdi army, and that the Iraqi police were supported by US Special Forces.
Meanwhile five people were killed in Duluiyah, when a suicide bomber blew up a truck at a checkpoint near the headquarters of the local Awakening council.
A police captain in the town, 72kn north of Baghdad, said that the authories were tackling al-Qaeda fighters in the area.
"We are determined to put an end to the al-Qaeda fighters and Duluiyah and its outskirts," he said.
The US military also reported on Wednesday that one soldier was killed and two others were injured Tuesday when a bomb went off near their patrol in Diwaniyah, 200km south of Baghdad.
Reports also spoke of five Iraqi policemen being wounded during clashes between US and Iraqi forces and al-Mahdi Army militiamen.
The fighting also left a number of vehicles and residential buildings damaged.
Iraqi police have found five unidentified bodies in various areas in Baghdad, police sources said.
Three truck drivers have been killed in three bomb explosions near the Iraqi city of Samara and three others were injured and six trucks damaged in a bomb explosion in Mosul.
Police sorces said unidentified armed men killed Abd al-Haidari, an al-Sadr leader, in north Basra city.
The "Jihad and Islah Front" group has released footage of a bomb explosion targeting what it said was a US military vehicle in Duluiya town, north of Baghdad.
The videotape shows a military truck carrying a damaged vehicle, but Al Jazeera could not verify its authenticity from an independent source.
According to the US military there had been a drop in the number of attack since June, but that the last few weeks have seen a sudden increase in violence.