At least 18 Iraqi civilians have been killed and 21 others wounded as US troops continue a massive raid in the Iraqi capital of Baghdad.

"US and Iraqi troops conducted a pre-dawn raid on the neighborhood of al-Huseiniyah on Saturday and exchanged fire with fighters believed to be affiliated to Mahdi army." an Interior Ministry source said.

However, the American military claimed that six militants were killed in the air strike in Huseiniyah in northeastern Baghdad.

The US military account contradicted reports from Iraqi police and hospital officials who said 18 civilians had been killed and 21 wounded in a 2 am attack in Husseiniyah.

Fierce clashes between the two sides erupted while US helicopters struck several buildings in the neighborhood.

Troops on the ground engaged the fighters for two hours and arrested some of them. Following the withdrawal of the troops, Hussainiya residents rushed the wounded to nearby hospitals.

The toll could rise, said the source, adding that neighborhood residents and rescue teams were removing debris to look for more victims.

There have recently been several clashes between the American forces and the Mahdi Army.

Iraqi revered cleric blames the US for all of Iraq's woes, saying the White house is behind economic hardships and schism between Iraqis.

"We are now facing a brutal Western assault against Islam. This agenda must be countered with a cultural resistance,'' Moqtada al-Sadr said, explaining that the divisions in Iraq were part of the Western attack on Islam.

DT/KB