US forces in Iraq have killed 25 suspected insurgents in heavy fighting near Baquba, the US military has said.
US forces have launched several operations against Shia militants
The military said the target of the operation had been a Shia militia commander linked to the elite Quds Force of Iran's Revolutionary Guards.
An Iraqi police spokesman said several civilians had been killed or wounded in a US raid carried out in the same area.
The US has accused the Quds Force of helping arm Shia militant groups in Iraq. Iran denies any involvement.
Tehran is still demanding the release of five Iranians detained in the northern city of Irbil in January, who the US says have links to the force.
According to the US military, when its troops moved into an area west of Baquba in the early hours of Friday morning, they were confronted by insurgents armed with rocket-propelled grenades and assault rifles.
During the intense battle that followed, US aircraft were deployed "in an attempt to suppress the threat". An estimated 25 "criminals" were killed and two buildings destroyed, the military said.
The target of the raid was a "Special Groups commander believed to be associated with members of the Iranian Revolutionary Guard-Quds Force", the statement said, referring to a breakaway cell of the Shia Mehdi Army militia.
The US military said its intelligence indicated he was responsible for "facilitating criminal activity" and smuggling weapons from Iran to Baghdad.
Police said civilians had been killed and wounded in a raid near Baquba
The radical cleric, Moqtada Sadr, suspended the Mehdi Army's activities for six months at the end of August, but US forces have launched several operations against what they call rogue or extremist elements of the group since.
Later, an Iraqi police spokesman said a number of civilians had been killed and wounded in a US air raid on the village of al-Jaizani, also west of Baquba.
"Twenty-five people were killed and 40 others wounded, including women and children in the US air strike," Khudayir al-Tamimi told the AFP news agency.
A resident, Ahmed Mohammed, said that he had seen 24 bodies on the ground in al-Jaizani and he had travelled with 15 of the wounded to a hospital in Baghdad.
A US military spokesman could not confirm their operations in the area had included a strike on al-Jaizani.
BBC Baghdad correspondent Jon Brain says the raid will highlight tensions between Iraq and Iran that have been heightened since the arrest by the US last month of an Iranian national, Mahmudi Farhadi.
He is one of six Iranians detained in Iraq in recent months.
Lt Gen Raymond Odierno, the US second-in-command in Iraq, has told the Washington Post newspaper that he will recommend that the Iranians should not be released when their cases are reviewed later this month.
"Militarily, we should hold them," he said.
US military officials have also announced the death of a US soldier by small arms fire during operations in the south of Baghdad. The soldier died on Thursday.
More than 3,800 members of the US military who have died since the invasion of Iraq in March 2003.