Fighting has broken out in central Baghdad as Iraq's interim government signed a tough new security law to combat the insurgency.
Iraqi national guards sealed off the area after the clash
Black smoke poured from a building in Haifa Street hit by US helicopters during the clash with rebels, a Reuters photographer said.
At least two Iraqi national guards were killed in the fighting, said officials.
Earlier, several people were hurt when mortar shells landed near the offices of the Iraqi prime minister's party.
The latest attacks came a day after four US marines were killed in clashes with rebels near Baghdad.
In a separate incident on Tuesday, at least six people were killed in a suicide car bombing north of the capital.
Fleeing for their lives
The fighting in the Haifa Street area broke out at about 1100 local time (0700 GMT), as insurgents began firing guns and throwing grenades, Iraqi witnesses said.
Baghdad has been facing almost daily mortar attacks
The gunfire forced pedestrians and drivers to flee for their lives the busy commercial thoroughfare on the western side of the Tigris River.
Two US helicopters later fired at the building on the street, the Reuters photographer said.
At least two Iraqi national guards were killed and several others injured in the clash, Iraqi security forces and witnesses said.
Earlier on Wednesday, at least five people were injured when several mortar rounds hit a medical centre near the offices of Prime Minister Iyad Allawi's Iraqi National Accord party in central Baghdad.
Several other projectiles targeted the adjacent heavily-fortified Green Zone, where the new Iraqi government and also the US and the British embassies are based, correspondents say.
The attacks came shortly after Mr Allawi gave himself broad emergency powers to tackle the militants.
The new law allows him to impose curfews when he sees fit, although only for a limited time.