US-led forces in Iraq have clashed with Shia militiamen in several cities, in a second day of fighting that has shattered a truce agreed in June.
Smoke was seen rising above Najaf
A US military spokesman said 300 supporters of radical cleric Moqtada Sadr had been killed in Najaf - a claim denied by Mr Sadr's Mehdi militia.
There has also been fighting in a Shia area of the capital Baghdad, and in a number of southern cities.
Mr Sadr's aides have called on Muslims to take up arms against "occupiers".
The latest violence in Najaf, home to Shia Islam's holiest shrine, is being described as the worst there since June's truce agreement.
The June deal ended a two-month uprising by Mr Sadr's Mehdi militia against the coalition across central and southern Iraq.
Lieutenant Colonel Gary Johnston of the 11th Marine Expeditionary Unit in Baghdad put the number of pro-Sadr militiamen killed in Najaf during Thursday and Friday at 300.
But a spokesman for the militia denied this, saying just 36 fighters had been killed across Iraq over the past two days.
The two sides blame each other for starting the latest outbreak of fighting.
The US military reports that at least two American troops have been killed in Najaf during the fighting, and a US helicopter has been shot down, injuring two.
"The marines are here and I think you know how they operate," said Lt Col Johnston. "If you kill a marine, the marines are going to fight back."
Friday saw US helicopter gunships fire rockets at Najaf's vast Valley of Peace cemetery, where militiamen are based.
Mr Sadr's aides called on the interim government to "intervene to stop the American attacks".
But the governor of Najaf province, Adnan al-Zorfi, on Friday urged the Mehdi militia to leave the area within 24 hours or face a continuing offensive.
"There is no compromise or room for another truce," he said.
Mr Sadr's aides have accused US troops of damaging a minaret of Najaf's holiest shrine, the mausoleum of Imam Ali.
They are calling on local Muslims to "take up arms to defend your holy places
against the occupiers".
The cleric, meanwhile, in a message read out by an aide in the city of Kufa, near Najaf, declared the US his "enemy".
"The Iraqi president said 'America is our friend', but I say 'America is our enemy'," Sheikh Jaber al-Khafaji quoted Mr Sadr as saying.
In the Shia suburb of Sadr City in Baghdad, at least 19 people were killed and more than 110 wounded during clashes between Mehdi militiamen and US troops on Thursday and Friday.
Another two Iraqis were reported killed in clashes between US forces and insurgents in the city of Samarra.
Further south, British troops on Friday clashed with Mehdi militiamen for a second consecutive day in Basra.
Reuters news agency said residents took shelter as street battles raged in the city centre.
At least two militiamen died in a gunfight with UK soldiers on Thursday.
Multinational troops also came under fire in the southern cities of Amara and Nasiriya on Friday.
The health ministry said six Iraqis had been killed and 13 others wounded in Nasiriya since Thursday.
Italian soldiers exchanged fire with assailants who attacked their positions and a police station overnight, an Italian military spokesman said.
"It has been an extremely tense night and we are maintaining maximum alert," Captain Ettore Sarli, chief spokesman for Italian forces in Nasiriya, told Reuters news agency early on Friday.