Officials in Iraq say at least 200 militants were killed on Sunday during clashes with US-backed Iraqi troops ahead of a major Shia Muslim festival.
The violence near Najaf was blamed on a previously unknown group, the Soldiers of Heaven. A government spokesman said its leader was among those killed.
Three Iraqis and two US troops also died. Fighting had largely ended by Monday morning, reports said.
Police patrolled the area and frisked residents at gunpoint.
Sunday's fighting occurred in the Zarqa area, north of the holy city of Najaf.
The BBC's Mike Wooldridge in Baghdad says there is no independent confirmation of the scale of casualties and there is still uncertainty about the group.
The US military said the two soldiers were killed when their helicopter was shot down, but it did not confirm any of the other casualty figures.
Weapons seized
Iraqi government spokesman Ali Dabbagh said the Soldiers of Heaven was a Shia fringe group and identified its slain leader as an Iraqi called Ali bin Ali bin Abi Taleb.
Earlier, security sources said the insurgents involved in the fighting had included both Shia and Sunni Muslims, as well Afghans, Saudis and Sudanese fighters.
Provincial officials said the militants were well-equipped and had anti-aircraft missiles.
Najaf governor Asaad Abu Gilel said they had been intent on attacking Shia clerics and pilgrims marking the festival of Ashura.
'Civil war'
On Monday, a series of mortar, bomb and gun attacks across Iraq left at least 36 people dead and scores injured, security officials said.
The violence appeared linked to Ashura, which reaches its climax on Tuesday with processions in Najaf, Karbala and other Shia shrines.
Ashura is holiest day in the religious calendar for Shia Muslims, commemorating the 7th Century death of Imam Hussein.
In the past, Shias have been hit by co-ordinated attacks as they marked Ashura with huge public gatherings.
Separately, a Washington-based think-tank says Iraq is rapidly sliding deeper into civil war.
The Brookings Institution says the fighting is likely to spill over into neighbouring countries, resulting in mass deaths, serious disruption of Gulf oil supplies and a drastic decline in US influence in the region.
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