Angry Iraqis in the flashpoint town of Falluja have stormed the mayor's office after a large explosion rocked the building, civil defence officials say.
Falluja has been the scene of frequent violence
The explosion led to residents taking to the streets and a local man was shot dead in the ensuing argument.
Two Iraqis also died in clashes with US troops in a Baghdad suburb.
Tension is high in Iraq where Saturday marks six months since President Bush declared an end to major hostilities.
There has been an upsurge in attacks this week. Scores of people have been killed, many of them in a series of bombings in Baghdad on Monday.
The US consulate has warned American nationals to take care amid rumours of a "day of resistance" this weekend in the Iraqi capital.
"US citizens are encouraged to continue to maintain a high level of vigilance and continue to take appropriate steps to increase their security and awareness," the consulate said in a statement.
Continuing attacks promoted anger to boil over in Falluja, a Sunni Muslim town about 65 kilometres (40 miles) west of Baghdad.
An explosion went off near the mayor's office, bringing residents onto the streets to protest that their neighbourhood was being targeted because the US-appointed mayor worked there.
"They came in to say that they were fed up with bombs and attacks against the municipality every day," civil defence worker Ahmad Khalil al-Rawi told the French news agency, AFP.
An argument broke out, police opened fire and killed a local man, he said.
A short while later, several men opened fire on the municipal offices with assault riles and rocket-propelled grenades.
An AFP correspondent saw flames rising from the building as the attackers clashed with police for a couple of hours. Some people were seen looting furniture from the offices.
The assailants dispersed when a convoy of US armoured vehicles moved in.
Falluja, a stronghold of supporters of ousted President Saddam Hussein, has been the scene of repeated attacks.
Reports from the western Baghdad suburb of Abu Ghraib say clashes broke out when American soldiers tried to clear market stalls from a main road.
Demonstrators threw stones at troops and Iraqi police, and set tires ablaze.
At least two Iraqis were killed in the violence. Two US soldiers were injured in a grenade attack in the same location.
Further north, US troops moved before dawn to seal off Saddam Hussein's home village near Tikrit, the Associated Press reported.
Soldiers set up checkpoints and surrounded the village of Uja with barbed wire. They also ordered residents to register for identity cards.
"This is an effort to protect the majority of the population, the people who want to get on with their lives," AP quoted Lieutenant Colonel Steve Russell as saying.