Military spokesman says the troop “surge” has helped to secure the country.
The US military recently launched a crackdown in and around Howr Rajab and encouraged several Sunni Arab men to join the fight against al-Qaeda.
Thursday’s attack came a day after leaflets were distributed in the village warning Sunni Arabs against becoming US allies.
“Iraq is still under foreign occupation and Iraqis continue to die in great numbers”
According to Lieutenant-Colonel Ibrahim Abdullah, a police official, in al-Kulaiya villagers from the Shia al-Ambagiya tribe defended themselves and in the ensuing clashes nine people were killed.
“Seven fighters from al-Qaeda and two from the Ambagiya tribe were killed in the gun battle that lasted an hour,” he said.
Abdul Salam Harfash, a Baquba general hospital doctor, confirmed the casualties.
In a similar development, Major-General Abdul-Karim al-Rubaie, the head of Iraqi military operations in Diyala province, told Reuters news agency that Iraqi soldiers supported by US forces killed 19 al-Qaeda fighters.
They were killed in an area controlled by the al-Qaeda-linked Islamic State in Iraq, he said.
Two members of a neighbourhood police unit were killed in the operation and another three were wounded.