Iraqi authorities in Basra have agreed to formally resume co-operation with the British Army.
Iraqi police came to support UK soldiers during the riots
The decision was reached after a meeting between provincial officials and UK diplomats and Army officers.
It follows several weeks of boycott after relations between Iraqis and British forces soured in the wake of a series of flare-ups.
Iraqi police supported British troops during the unrest that followed the crash of an Army helicopter.
British investigators are examining the helicopter's wreckage to find out if it was shot down, as some reports claim.
Helicopters are flying once again into the southern Iraqi city, but fast and low to make them less vulnerable to an attack.
While troops are obviously cautious, they found a lot of sympathy from local Iraqis on their patrol, reports the BBC's defence correspondent Paul Wood in Basra.
"This isn't an insurgency, this is a mixture of crime, militias, the search for political power which has always happened in Iraq through the use of violence and it's just happening again," said Col Johnny Bowren of the Light Infantry.
"There are some people who don't want us here, some people who are making money from us being here and a mixture of people - a very small minority are willing to take us on violently."
The governor of Basra Mohammed al-Waeli announced on Sunday that security co-operation with the British would resume after they were suspended for several weeks.
Tensions have flared between residents and British troops, fuelled most recently by the arrest of several Iraqi security officials suspected of conspiring with the militia.
British commanders said Governor al-Waeli's declaration is another sign of hope and a sign that the exit strategy for Iraq remains on track.
Defence Secretary Des Browne offered his sympathies to the families of those who died. He will make a statement to the House of Commons about the incident on Monday.
The Ministry of Defence said the immediate family of five servicemen had been told that they are missing presumed dead.
British ministers have said it is unclear why the craft went down.
But if enemy fire is confirmed as the cause of the crash, it would be the first time a British military helicopter has been shot down in the area.
The Iraqi president, Jalal Talabani, has sent a message of condolence to UK Prime Minister Tony Blair saying the apparent shooting down was a "hideous crime against the British".
An investigation is also under way into the unrest that followed the crash, during which five people, including two children, are said to have been killed.
The British Army has said the reported civilian casualties are likely to have been inflicted by shots fired at UK troops by militants.
Civilians could also have been injured by a militant mortar attack, Army sources added, but there has been no independent confirmation.
British troops dismantled their security cordon around the crash site on Sunday, but Iraqi security forces maintained a heavy presence throughout the city.
A hotline has been set up for families seeking information: 08457 800 900.