Iraq's security minister, a Shi'ite political ally of Prime Minister Ibrahim al-Jaafari, has accused US and Iraqi troops of killing 37 unarmed people in an attack on a mosque complex yesterday.
"At evening prayers, American soldiers accompanied by Iraqi troops raided the Mustafa mosque and killed 37 people," Abd al-Karim al-Enzi, minister of state for national security, said.
"They were all unarmed. Nobody fired a single shot at them (the troops). They went in, tied up the people and shot them all. They did not leave any wounded behind," he told Reuters.
Shi'ite politicians had earlier said 20 people were killed at the mosque. The US military's account of Sunday evening's incident said Iraqi special forces with US advisers killed 16 "insurgents", arrested 15 people and freed an Iraqi hostage. The military denied entering any mosque.
Earlier police said US forces clashed with the Mehdi Army militia of radical Shia cleric Moqtada al-Sadr, killing 20 fighters. With Baghdad under night curfew it is difficult to pin down what happened, but unusually strident anti-US coverage on government-run state television showed a fierce confrontation between the ruling Shia Islamists and the US administration.
A spokesman for Prime Minister Ibrahim al-Jaafari said the premier was "deeply concerned" and had called the US commander in Iraq, Gen George Casey, who said there would be a full inquiry.
US forces arrested 41 officials from the Shia-controlled Interior Ministry and freed 17 foreigners from a secret jail, government, political and US sources said.
Northeast of Baghdad, Iraqi troops found 30 bodies, many of them beheaded, on a village street. In the same area around Baquba, police arrested one of their own majors, the brother of the regional police chief, over Shia death squad killings.
The events came as Washington raises pressure on the Shias to bring minority Sunnis into government - it is even planning landmark talks with hostile Shia Iran to break the impasse. Many fear a failure of the plan could plunge Iraq into civil war.
Though supposedly disbanded in 2004 after two uprisings were crushed by US forces, the Mehdi militia remains a significant force, along with other pro-government militias that Sunnis accuse of running death squads against them.
Since 2004, Sadr, with apparent Iranian backing, has emerged as a important player within the dominant Shia Alliance bloc. He backing Mr Jaafari to remain prime minister despite opposition from Sunnis, Kurds and some alliance rivals.