US-led forces have battled fighters in what they said was an operation to regain control of a major street cutting through the heart of Baghdad.
"There is a fight going on. Units are engaged," Steven Lamb, a US military spokesman said on Wednesday, confirming an operation was under way to restore control to the mainly Sunni Arab area.
Thirty suspected fighters were killed and 35 more detained during day-long battle in the area, Mohammed al-Askari, Defence Ministry spokesman said.
Haifa Street, a long street of high-rise buildings, runs along the west bank of the Tigris River that cuts through the capital.
US helicopters attacked armed men holed up inside the buildings, where US and Iraqi forces said they killed more than 100 fighters earlier this month.
Lamb said Wednesday's operation involved US forces and the Iraqi police and army.
US armoured vehicles firing their heavy machine guns joined the fighting and troops also fired mortars after coming under machinegun, mortar and rocket-propelled grenade attack during the operation to restore Iraqi security control of the Sunni stronghold.
"A lot has been coming from high-rise buildings. We are firing at terrorists in those buildings," Lamb said.
'People killed , buildings demolished'
The Sunni Muslim Scholars Association condemned the raid, calling it "a campaign of genocide" and said a number of buildings had been demolished and people killed.
The US military said Wednesday's mission was "not an operation designed solely to target Sunni insurgents, but rather aimed at rapidly isolating all active insurgents and gaining control of this key central Baghdad location".
Meanwhile, a US soldier and two marines have been killed in Iraq, the military said, raising its losses this month to 53.
The soldier was shot dead and two were wounded on Wednesday while on patrol in central Baghdad, a statement said.
Security sources said a helicopter owned by Blackwater, a US security company, that crashed in the area on Tuesday was forced down after the pilot was shot dead.
Three others on board the aircraft, which had been guarding a diplomatic convoy on the ground, may have been shot on landing, they said, although other reports suggested they died when the aircraft crashed.
A fifth person on a second Blackwater helicopter was also shot dead.
Zalmay Khalilzad, the US ambassador to Iraq, paid his condolences to the security contractors, who helped protect US embassy personnel, saying he had known them personally.
"We lost five fine men. It was a very bad day yesterday."
Photo caption
Smoke rises over Baghdad