The fire crashed into a residential neighbourhood as people were sitting down for their evening meal on Thursday in the mainly Shia city in a Sunni heartland where sectarian violence has killed dozens in the past few days.
It was only the latest episode in a tit-for-tat series of revenge killings that erupted in the town on October 12, with the killing of a Sunni leader.
There have been differing accounts of the severity of the clashes, with US forces acknowledging the death of 14 Shia and 28 Sunnis in the first two days of clashes before Iraqi troops pacified the area.
“We are seeing local leaders take control of the situation,” Major General William Caldwell, a US military spokesman, said on Thursday. “They are the ones who brought the situation under control.”
There was also a meeting on Wednesday of leaders from Salaheddin province, including religious figures and tribal sheikhs, to pledge inter-sectarian brotherhood.
“We’re all brothers-in-arms,” said Amer Abdul, the mayor of Balad, according to a US military account of the meeting. “We’re all Iraqis and Arabs.”
Iraqis on the scene and local police, however, have described a much more chaotic situation. They say armed Shia groups roamed the area for days afterwards and killed dozens of Sunnis, with a body count well over 60.
Shia fighters were engaged in deadly street battles with Iraqi police in the southern city of Amara on Friday after overnight clashes left 15 dead, witnesses and medics said.
Fighting erupted in the city after police arrested a member of cleric Moqtada al-Sadr’s Mahdi Army on suspicion of killing a local intelligence officer in a bomb attack, according to al-Sadr supporters.
Zamil al-Oreibi, the medical director of the city’s health department, said: “There are 15 dead, ten of them gunmen, and 90 wounded, including militia, police and civilians. The fighting is continuing.”
On Wednesday the chief of Amara’s police intelligence service was killed along with three colleagues by a roadside bomb. The next day a Mahdi Army leader was arrested, provoking a reprisal attack by his supporters.
US forces have raided a Shia mosque in the Risala district of southern Baghdad, killing one person and detaining two.
In Baghdad, a roadside bomb killed one civilian and wounded three more in the Dora district.
In a separate development, a Mahdi Army leader was arrested with three of his brothers when a joint US and Iraqi force raided his house in the town of Hindiya, just north of the city of Kerbala, 110km south of Baghdad.
In the north of the country, gunmen killed one worker and wounded three others working for a US base near the oil refinery city of Baiji.