Iraqi police raided strongholds of Shi'ite cleric Moqtada al-Sadr's Mehdi Army in the southern city of Kut on Wednesday after the militia broke a ceasefire and clashed with security forces a day earlier.

The city's police chief said at least 11 people were killed in Tuesday's gun battles in which U.S. special forces called in air strikes after Iraqi authorities asked them for help.

With U.S. forces already stretched by an upsurge in violence in Iraq since January, such ceasefire violations are a worrying development. U.S. commanders have credited the ceasefire with sharply reducing sectarian bloodshed that threatened civil war.

But the commanders say security gains can only be cemented by progress towards national reconciliation. Last month parliament passed an amnesty law hailed by Washington as a major step towards healing rifts between Shi'ite and Sunni Muslims.

The law is seen as benefiting many Sunni Arabs held as security detainees. Giving the first figures, President Jalal Talabani's office said 1,293 prisoners had been released as of Wednesday. Iraqi jails hold about 23,000 prisoners.

A day after saying he would quit, the top U.S. commander for the Iraq and Afghanistan wars, Admiral William Fallon, visited Baghdad. Fallon resigned after a magazine reported he was pushing President George W. Bush to avoid war with Iran.

"He was in Baghdad this morning. As far as we know it was just a regular visit to Baghdad," said U.S. military spokesman Navy Lieutenant Michael Street.

In Kut, police officer Lieutenant-Colonel Sudad Jamil said police had regained control of four districts where the Mehdi Army had a strong presence and were going house-to-house hunting for gunmen who had taken part in Tuesday's fighting.

The largest neighborhood in Kut, al-Jihad, had been sealed off by Iraqi security forces, he said. Residents inside Jihad said Mehdi Army gunmen were everywhere and there were rumors that roadside bombs had been planted in street entrances.

Districts "purged"

"We have purged four neighborhoods and arrested a group of Mehdi Army gunmen, including a senior leader," said another police officer, Lieutenant Aziz al-Amara, who commands a rapid reaction unit.

However, Kut police chief Major-General Abdul-Hanin al-Amara said at a news conference that those detained had told police they belonged to a religious movement, suggesting they were not linked to Sadr. He gave no further details.

The director of Sadr's office in Kut, Abu Sadek insisted the gunmen were "outlaws" with no links to the cleric.

Sadr renewed a six-month ceasefire last month but at the weekend issued a statement telling followers they could defend themselves if attacked. Until Tuesday's fighting, there had been no major violations of the truce.

There were differing accounts of what triggered the clashes. Iraqi police said it started after U.S. and Iraqi forces were dispatched to find a mortar team who had attacked a U.S. military base in the area on Monday night.

The U.S. military said in a statement late on Tuesday that U.S. special forces had come to the aid of an Iraqi security patrol and had been attacked by a large number of "suspected criminal militia fighters."

A health official in Kut, who declined to be named, put the final death toll from Tuesday's clashes at 13, including two policemen, three children and one woman.

PHOTO CAPTION

Members of the Shiite Mehdi Army parade down a street in the southern Iraqi town of Basra November 28, 2006.

Reuters