"We estimate we've killed 300 anti-Iraqi forces in the past two days of fighting. We've had a total of three killed, 12 wounded," Marine Captain Carrie Batson told AFP.

But a spokesman for a radical Shia group denied U.S. marines had killed an estimated 300 fighters in two days of battles in Najaf.

Sheik Raed al-Qathimi told Reuters that 36 fighters loyal to Shia cleric Moqtada al-Sadr had died in fighting across Iraq since Thursday.

U.S. forces backed by helicopter gunships battled militia loyal to the rebel cleric, fueling fears of a second Shia uprising.

British and Italian troops also fought members of Sadr's militia, known as the Mehdi Army, across Shia-dominated southern Iraq -- in Basra, Amara and Nassiriya -- while fighting raged in Sadr City, a Shia district of Baghdad.

The Health Ministry said fighting in Sadr City alone had killed 20 Iraqis and wounded 114 since early on Thursday, while in Nassiriya six were dead and 13 wounded.

Two U.S. marines were killed in Najaf on Thursday, the U.S. military said. The Health Ministry said one person was killed in Najaf and 25 injured, but local officials said dozens died in 48 hours of heavy fighting.

The flare-up of tension with radical members of Iraq's majority community, less than three months after Shi'ite militants last rose up across the south, is a severe headache for Iraqi Prime Minister Iyad Allawi's fledgling government.

But Foreign Minister Hoshiyar Zebari was upbeat. "We have every confidence in our new government, our security forces and our allies to contain this conflict." But, he said, "we need the continued support and engagement of our allies."

In the previous uprising, in April and May, hundreds of Iraqis and dozens of U.S. troops were killed.

Yet Sadr, a young cleric with an ardent following among poor, disaffected youths, appeared keen to stop the fighting. Via a spokesman in Baghdad, he called for a resumption of a truce struck in June to end the previous bout of unrest.

"We have no objections to entering negotiations to solve this crisis," Sadr's spokesman in Baghdad, Mahmoud al-Sudani, told reporters. "As I have said in the name of Sayed Sadr, we want a resumption of the truce."

While Sadr may be popular with frustrated young Shias, many of Iraq's mainstream community follow Ayatollah Ali al-Sistani, the most influential Shia cleric in Iraq who has carefully and quietly tried to keep a lid on Sadr's agitating.

In a worrying move for his followers, Sistani, a 73-year-old Iranian-born cleric, left Iraq on Friday, traveling to London via Lebanon for treatment for a heart problem, sources said.

CEMETERY FIGHTING
Tension has been rising in Najaf since Iraqi security forces surrounded Sadr's house earlier this week. Fighting there on Thursday was the fiercest since the uprising in April and May.

U.S. Marines recently replaced the U.S. Army in Najaf and analysts have suggested the upsurge in violence is linked to the marines taking a more aggressive approach with Sadr's militia.

At the same time, attempts by the interim government to draw Sadr into the mainstream appear to have faltered, which may have prompted the cleric to redouble his militant approach.

Militiamen shot down a U.S. helicopter as it was trying to evacuate a wounded soldier on Thursday. No one was killed, but the pilots were wounded. The U.S. military estimated as many as 20 militiamen were killed in the day's fighting.

Early on Friday F-16s, AC-130 gunships and helicopters patrolled the skies over Najaf, covering U.S. troops battling insurgents in and around Najaf's cemetery, the largest in the Arab world and a safe haven for militants.

On a street leading from Najaf to the nearby town of Kufa, where Sadr often preaches on Fridays, U.S. tanks fired on hotels suspected of being used by militiamen to snipe at U.S. forces.

Fighting also flared near Najaf's shrines, some of the holiest in Shia Islam, and some alleged that gunfire had damaged the dome of the Imam Ali shrine. Most Iraqi Shia react with outrage when clashes erupt near the sacred sites.

(Reuters and AFP)