Shia fighters loyal to rebel cleric Moqtada al-Sadr launched a series of attacks on British forces in the southern city of Basra today, witnesses said.
At least two Iraqis were killed and three British soldiers wounded in the fighting, a British military spokeswoman said.
Hundreds of Sadr's Mehdi Army militiamen armed with assault rifles and rocket-propelled grenades took over several areas of Iraq's second-biggest city and set up checkpoints on the streets.
Bursts of gunfire and explosions echoed through the city. The British military reported some exchanges of fire between soldiers and gunmen.
Witnesses said fighters were firing at British patrols and positions in several quarters of Basra. Some streets were largely deserted and many shops closed.
Residents said they had heard some Mehdi militiamen vowing to expel British troops from the city.
A British spokesman said he was aware of "disturbances" in Basra. Large crowds, including armed men, had gathered in the city centre near the headquarters of the South Oil Company, he said.