A raid in Baghdad has killed 49 people, according to the US military.

The deaths took place in an early morning operation in Sadr City on Sunday, "targeting criminals believed to be responsible for the kidnapping of coalition soldiers in November 2006 and May 2007", a US military statement said.

Lieutenant-General Justin Cole, a US military spokesman, acknowledged in an email that aircraft were used on Sunday but was not more specific.

Two police sources said the dead included women and children.

One of the sources said the raids came after a US vehicle was targeted by a roadside bomb.

'Criminals'

James Bays, Al Jazeera's correspondent in Baghdad said that although the US claimed all the victims were "criminals", some of those killed were clearly civilians.

A television cameraman has filmed bodies of dead children, he said.

Iraqi police and hospital officials said US helicopters and fighter jets bombed buildings during the 5am raid in the district.

Several houses and stores were damaged.

Clouds of black smoke rose from the area early on Sunday as sirens wailed, heavy gunfire echoed and US helicopters circled overhead, Reuters television footage showed.

The US military said "an estimated 49 criminals" were killed in three separate engagements during a raid targeting a suspected rogue Shia militia leader specializing in kidnapping operations for which he sought funding from Iran.

US troops returned fire after coming under sustained attack from automatic weapons and rocket-propelled grenades from nearby buildings as they began to raid a series of buildings in the district, according to a statement.

It said about 33 fighters were killed in the clash. Ground forces then called in air strikes, which killed some six fighters.

Funerals

Sadr City is the main stronghold in Baghdad for the Mahdi Army, a Shia militia loyal to Muqtada al-Sadr, an anti-American cleric, and has witnessed frequent clashes between US forces and fighters.

Three US soldiers were kidnapped south of Baghdad on May 12.

The body of one of the soldiers was found later that month but the other two are classed as missing and captured.

A US army translator of Iraqi descent, was kidnapped on October 23 last year when he went to visit relatives, including his Iraqi wife, in Baghdad.

His family said he was taken by the members of the Mahdi Army.

One of the police sources said the air strikes left several houses, shops and cars ablaze.

Relatives gathered at the Imam Ali hospital as the emergency room was overwhelmed with bloodied victims and the dead were placed in caskets covered by Iraqi flags.

Priests set free

Also on Sunday, a Vatican spokesman confirmed that two Catholic priests, kidnapped in the northern city of Mosul, had been freed.

"I can confirm that they are free," the spokesman said.

Fathers Pius Affas and Mazen Ishoa had been kidnapped last Saturday after being threatened by an unknown group.

They are now back at their church in Mosul and well, church negotiators told AFP on condition of anonymity.

A day after the abductions, Pope Benedict XVI issued a plea from the Vatican for their release.

PHOTO CAPTION

A child injured in the raid