Iraqi PM Nouri Maliki has declared a month-long state of emergency in Basra, which has been plagued by sectarian clashes, anarchy and factional rivalry.
UK troops and Iraqi police are among the victims of recent unrest
Visiting the city, Mr Maliki said he would use an "iron fist" to crush those who threaten security.
The prime minister has accused criminal gangs of holding the city's oil exports and other trade to ransom.
More than 100 people have died in the last month in Basra - until recently seen as one of Iraq's safer cities.
Relations between Basra's garrison of 8,000-odd British troops and the city's dominant Shias used to be cordial but have deteriorated rapidly in the past few months.
Nine British soldiers were killed in May alone.
Many Sunni mosques have also been closed amid rising sectarian divisions, and there are growing tensions among different Shia groups vying for political power and a share of the area's vast oil wealth, the BBC's Ian Pannell says.
A Shia faction has also threatened to sabotage oil exports through Basra to exert leverage over the Iraqi government.
Mr Maliki was greeted by some 700 political leaders, tribal sheikhs and security officials in Basra, AP said.
In a keynote speech, he said security was his first, second and third priority and would draw up a plan to deal with the violence.
"We shall strike with an iron fist on the heads of the gangs or those who tamper with security," he told them, standing at a podium with an Iraqi flag as backdrop.
He said a "speedy and effective" plan would be drawn up to "achieve security at the level which gives a feeling of safety to the citizens".
"What is going on in this city, the city of martyrs and sacrifices?" he said.
"We will not let Basra keep bleeding with the existence of these gangs while there are full security forces in it."
Describing the state of emergency as a "broad security mobilisation", he said he hoped through negotiations to ease Basra's crisis.
According to the BBC's Ian Pannell, the state of emergency will mean a heavier security presence on the streets of Basra, with more checkpoints, patrols and searches.
But, he said, it is not clear if Iraqi forces will enforce the emergency alone, or whether British troops will also play an expanded role supporting them.
The real test of Mr Maliki's new government will be in its ability to restore order on the ground - not in the plans it draws up, our correspondent says.
He says Mr Maliki must show he can first bring order to Basra, a city dominated by his fellow Shias, before he can address the unrest in other parts of the country.
Tackling the carnage
As well political factions, criminal gangs are part of the security problem in Basra, blamed for a wave of kidnappings and murders.
Col David Cullen, chief of staff at the multi-national military headquarters in Basra, told the BBC's Today programme that security in the city had "slipped" in relation to other provinces under British responsibility.
He acknowledged there had been "a number of difficult months" recently when local political authorities had sought to "not engage with us".
"The south is much larger than Basra, there are four provinces here, there is peace, stability, developing prosperity and increasing sovereignty in the other three provinces," he said.
"Basra has slipped behind almost certainly as a result of that disengagement."
Mr Maliki's government - which includes members of the main Shia Muslim, Sunni Arab and Kurdish parties - was approved by parliament earlier in May, after five months of negotiations following December's general elections.