Witnesses reported explosions and gunfire coming from the center of the city, which is in the so-called Sunni Triangle west of Baghdad. The U.S. military said the operation was in response to last Wednesday's gruesome attack in which an anti-American mob ambushed a group of contractors, beating and dragging four bodies through the streets.
Violence also broke out Monday in a Shiite neighborhood in Baghdad, Shuala, where members of radical Shiite cleric Muqtada al-Sadr's "Al-Mahdi Army" militia clashed with a U.S. patrol. The Associated Press reported that an American armored vehicle was seen burning, and an Iraqi man was seen running off with a heavy machine gun apparently taken from the vehicle.
Sadr fiercely opposes the U.S.-led occupation, but has not previously had widespread support among Shiites who perceive him as too young and radical to lead. But his message appears to be gaining popularity through his savvy use of public appearances, lengthy speeches and the strength of his private militia.
"We have one single goal, which is to remove the occupiers from the country," Sadr told Reuters in an interview in the Shiite holy city of Najaf last year.
Sadr, believed to be about 30, derives his authority from his father, Ayatollah Mohammed Sadeq al-Sadr, who was murdered along with two elder sons during the rule of ousted Iraqi leader Saddam Hussein, reportedly for defying the dictator.
The young Sadr's image is now a familiar sight on posters held aloft by chanting supporters alongside the more conventional ones of his father and other senior clerics, as well as the founding fathers of Shiite Islam.
Large protests over the weekend in Baghdad, Najaf, Nasiriyah and Amarah were apparently sparked by the arrest of one of his aides.
The insurgency that has dogged U.S. troops in Iraq for months has largely been led by Sunni Muslims but the weekend clashes represent a new uprising from the country's Shiite majority, which has mostly avoided violence with coalition forces.
Officials in Sadr's local headquarters said U.S. troops backed by helicopters mounted an incursion into Shuala in the morning, firing tank-mounted machine guns from a distance.
"People came out from their homes when they saw what was happening. U.S. troops fled when a (tank) transporter in the convoy was seized and set on fire," said Sheikh Ali, according to Reuters.
Paul Bremer, the top U.S. administrator in Iraq, declared Sadr an "outlaw" who threatens Iraq's security.
"Effectively he is attempting to establish his authority in the place of the legitimate authority. We will not tolerate this," Bremer told a team meeting convened to discuss how to respond to Sadr.
An Iraqi judge issued an arrest warrant for Sadr Monday in connection with the killing of another cleric last year at a Najaf mosque.
Clashes over the weekend between Sadr loyalists and other insurgents with coalition forces killed at least 48 Iraqis, eight American soldiers and one Salvadoran.
The fiercest fighting took place Sunday in the streets of Sadr City, Baghdad's largest Shiite neighborhood, where Shiite militiamen loyal to Sadr fired from rooftops and behind buildings at U.S. troops, killing the eight Americans. At least 30 Iraqis were killed and more than 110 wounded in the fighting, doctors said.
Militiamen also clashed with British troops in two southern cities, sparking violence that killed three Iraqis, witnesses said.
The violence was touched off by the arrest of Mustafa al-Yacoubi, a senior aide to Sadr, on charges of murdering Abdel-Majid al-Khoei, a rival Shiite cleric. Sadr supporters also were protesting the closure of his weekly newspaper by U.S. officials, who accused the paper of inciting violence.
A Marine was also killed Monday in the Fallujah area, the military said, without providing further details.
Meanwhile, President Bush said Monday he remains committed to the June 30 deadline for transferring power to the Iraqis.
"The deadline remains firm," the president told reporters.
Mr. Bush also voiced criticisms of Sadr and the violence his followers have incited.
"This is one person that is deciding that rather than allowing democracy to flourish, he's going to exercise force," the president said. "We just can't let it stand."
-- Compiled from wire reports and other media sources