Security forces killed 13 gunmen in firefights and air strikes in east Baghdad overnight, the US military said on Saturday, as witnesses said two children and their parents were among the dead.

A US military statement listed the dead in the battles as two snipers, two "criminals" firing rocket-propelled grenades, six gunmen wielding machine guns and automatic weapons and three men placing roadside bombs.

The US and Iraqi forces hit back with small arms fire, a Hellfire missile fired from an unmanned aircraft and artillery shells blasted from a M1A2 Abrams tank, the statement said.

The fighting erupted at around 9:00 pm (1800 GMT) in Sadr City, a sprawling district of east Baghdad controlled by the Mahdi Army militia of radical Shiite cleric Moqtada al-Sadr, the statement said.

Residents showed an AFP photographer a house in the Jamila sector of Sadr City which had been hit during what they said was an air strike.

Neighbours said that two small children and their parents were killed and another five family members wounded in the strike.

There was no immediate independent corroboration of the civilian casualties.

Residents of Sadr City said sporadic fighting continued through the night but died down after daybreak.

They said a two-week-old vehicle ban in Sadr City, home to around two million people, was partially lifted on Saturday and that some roads into the district had been reopened to traffic.

The main road in stayed closed, however, and major thoroughfares remained blocked by roadside bombs aimed at US military vehicles.

Motorists were instead using sidestreets to zig-zag their way through the township.

US and Iraqi forces have been battling militiamen in Sadr City and other Shiite areas of east Baghdad since Sunday, killing around 90 people.

Tensions have been further inflamed by the killing of senior Sadr aide Riyad al-Nuri on Friday in an attack carried out in broad daylight after the main weekly Muslim prayers in the Shiite holy city of Najaf.

Sadr has called for three days of mourning in all his movement's offices, while a symbolic funeral procession for Nuri was to be held in Sadr City later on Saturday.

The US statement said Friday night's clashes began when a security force convoy was attacked "by multiple roadside bombs, and small-arms fire from adjacent high-rise buildings."

Fighting back, security forces killed two snipers and two people firing rocket-propelled grenades from a building "where soldiers were taking RPG and machine gun fire."

At the same time, soldiers who were establishing a checkpoint came under small-arms, sniper and machine-gun fire as well as RPG attack after their vehicles were hit by a total of six roadside bombs.

A fierce firefight ensued in which four militants were killed, the statement said.

"Secondary explosions were observed from the building immediately after, possibly indicating arms and munitions were stored in the building," it said.

Soldiers then came under small-arms fire from another nearby building and US forces in the Abrams tank fired two 122mm rounds killing another two people.

About an hour later, it said, an unmanned aerial vehicle (UAV) spotted three people planting roadside bombs.

"The UAV fired one Hellfire missile, killing all three criminals," the statement said.

It said two vehicles were damaged but that no US or Iraqi soldiers were seriously wounded in the fighting.

Mahdi Army militiamen have been battling Iraqi troops since March 25, when Maliki ordered a crackdown on militiamen in the southern city of Basra.

Around 800 people have been killed in the fighting, which first broke out in Basra but quickly spread to other Shiite areas of Iraq.

The battles subsided after Sadr pulled his fighters off the streets on March 30, but fighting erupted in greater fury a week later in Sadr City when Iraqi and US forces began new operations in the sprawling township.