BAGHDAD (AP) _ Shiite militiamen battled with U.S. and Iraqi troops Friday in the holy city of Karbala, and the fighting left nine people dead and nearly two dozen wounded, local officials said.
Separately, the U.S. military said another American soldier was killed in fighting, raising to eight the number of troop deaths reported during the past two days.
The fighting in Karbala, 50 miles south of Baghdad, broke out as the joint U.S.-Iraqi force conducted a pre-dawn raid on the house of a leader of the Mahdi Army militia, which is loyal to radical Shiite cleric Muqtada al-Sadr, prompting the militia fighters to open fire, according to a police officer and a local council member.
The militia leader Razzaq al-Ardhi and his brother were arrested in the clashes, which lasted nearly two hours, the officials said, speaking on condition of anonymity because they weren't authorized to release the information. The U.S. military did not immediately respond to a request for comment.
The officials said four militiamen and five civilians were killed and 23 people were wounded in the fighting, which also damaged four or five houses.
Another clash erupted about three hours later as residents were removing the dead bodies from the hospital. Militiamen with the mourners briefly fought with a joint Iraqi army and police patrol, but no casualties were reported, the officials said.
In Baghdad, cleanup crews used tractors and cranes to clear out the debris after a highly sophisticated simultaneous truck bombing and rocket attack devastated a Shiite market district in one of the capital's safest central neighborhoods Thursday. Rescue workers pulled three more bodies from the rubble, and police raised the casualty toll to at least 31 people killed and 104 wounded.
Mourners streamed into mosques and funeral tents were set up in the neighborhood's main street, where black banners were hung on the walls with names of the dead.
Although suicide bombings are common in Iraq, it is rare for militants to stage such a double attack with such effectiveness. The attackers struck about 6:40 p.m. as the Karradah district's market area was packed with shoppers on the eve of the Islamic day of rest.
Police said an explosives-laden garbage truck exploded near the market at about the same time as a Katyusha rocket slammed into a three-story residential building about 100 yards away. Three columns of smoke billowed into the sky and fires burned on the ground after the thunderous explosions, which set cars and buildings ablaze.
An Iraqi military spokesman, Brig. Gen. Qassim al-Moussawi, later blamed Sunni extremists for the rocket attack. He did not mention the car bombing reported by police.
The attack was the deadliest in a series of attacks nationwide as at least 78 people were killed or found dead on Thursday.
With five days to go before the end of July, an Associated Press tally showed that at least 1,759 Iraqis were killed in war-related violence through July 26, a more than 7 percent increase over the 1,640 who were reported killed in all of June.
Victims of sectarian slayings were also on the rise. At least 723 bodies were found dumped across Iraq so far in July, or an average of nearly 28 a day, compared with 19 a day in June, when 563 bodies were reported found, according to the AP tally.
Those numbers included civilians, government officials and Iraqi security forces, and are considered only a minimum based on AP reporting. The actual number is likely higher, as many killings go unreported or uncounted.
Despite the increase in killings during the past month, U.S. and Iraqi officials have claimed some success in reducing violence as they fight to gain control of the capital and surrounding areas ahead of a pivotal progress report to be delivered to the Congress in September.
The U.S. soldier was killed Thursday by a roadside bomb in the restive Diyala province, where operations are under way to clear the area of Sunni insurgents north and east of Baghdad, the military said.
At least 65 U.S. troops have died this month, a relatively low number compared with American death tolls of more than 100 for each of the previous three months, according to an AP count based on military statements.
The No. 2 commander in Iraq, Lt. Gen. Ray Odierno, expressed cautious optimism about the downturn. He said it appeared that casualties had increased as U.S. forces expanded operations into militant strongholds as part of the 5-month-old security crackdown aimed at clamping off violence in the capital, but were going down as the Americans gained control of the areas.
``We've started to see a slow but gradual reduction in casualties, and it continues in July,'' he said at a news conference. ``It's an initial positive sign, but I would argue we need a bit more time to make an assessment whether it's a true trend.''
Nevertheless, the daily average for U.S. troop deaths so far in July is 2.46 _ higher than the daily average of 2.25 last year.
Odierno also said the U.S. military has noted a ``significant improvement'' in the aim of attackers firing rockets and mortars into the heavily fortified Green Zone in the past three months.
Without offering any proof, Odierno said networks continue to smuggle powerful roadside bombs and mortars across the border from Iran despite Tehran's assertions that it supports stability in Iraq.
His remarks came two days after the U.S. and Iranian ambassadors to Iraq met in Baghdad and agreed to establish a security committee to address the violence jointly.
The U.S. has accused Iran of fueling the violence by supporting and training Shiite militias. Iran has denied the U.S. allegations about its activities in Iraq.
``One of the reasons why we're sitting down with the Iranian government ... is trying to solve some of these problems,'' Odierno said at a news conference in the Green Zone, which is home to the U.S. Embassy and the Iraqi government headquarters.