British forces on the outskirts of Basra have reported that a violent civilian uprising against Saddam Hussein's regime has begun in the southern Iraqi city.
Major General Peter Wall, British Chief of Staff at Allied Central Command in Qatar, confirmed that it appeared an uprising had taken place, but that it was in its infancy and British troops were "keen to exploit its potential".
According to military intelligence officials, Iraqi troops in the city turned mortar fire on their own civilians in an attempt to crush the unrest, but Baghdad denies any revolt has occurred.
Two British soldiers from the Queen's Royal Lancers were killed and two seriously injured when their Challenger tank was hit in a "friendly fire" incident during fighting early on Tuesday on the outskirts of Basra.
From the outskirts of Basra, British troops have bombarded Iraqi mortar positions in the city in an effort to support the uprising, according to journalist Richard Gaisford, who is with British forces just outside.
He said that the British troops were using a system of radar tracking to pinpoint and then attack the mortar positions.
Coalition planes have also dropped two very large bombs on the Baath Party headquarters in the city, which is reported to have been reduced to rubble.
The main Shia Iraqi opposition group, the Iran-based Supreme Assembly for the Islamic Revolution in Iraq, which claims connections in the city said a revolt was taking place.
There have been multiple exchanges of fire between Iraqi forces on outskirts of Basra and British troops throughout the day.
British military spokesman Colonel Chris Vernon, reported that two British tank soldiers had been killed during the fighting.
Earlier Colonel Vernon told the BBC that Iraqi forces were using human shields to defend Basra.
Iraqi Information Minister Mohammed al-Sahhaf denied that any revolt had taken place in Basra.
"The situation is stable. Resistance is continuing and we are teaching them more lessons," he told Qatar-based al-Jazeera television.
The BBC's Tim Franks who is on the Iraq-Kuwait border, says that if reports of the uprising are true, this is what the British forces had hoped for.
"This is just the sort of encouraging indication we have been looking for... I think the uprising may in a sense put the boot on the other foot," Major General Wall said.
Until now, there has been no evidence of any support for British and American forces inside Basra.
Rather, the coalition forces believed that around 1,000 die-hard Saddam Hussein supporters were based in the city and keeping the population in check, our correspondent says.
The United Nations has warned of a potential humanitarian crisis in Iraq's second city, which is home to about 1.5 million people.
Some 100,000 children are at risk of disease as fighting there has continued for four days, disrupting supplies of drinking water, a UN spokesman said.
A UK naval ship loaded up in Kuwait with stocks of food, water and other supplies is still waiting to dock in the nearby Iraqi port of Umm Qasr as work continues to clear mines from the sea there.
The advance of coalition forces has also been hampered by fierce sandstorms - BBC correspondents travelling with coalition troops say units have been halted, with visibility reduced to just a few metres.