The attacker detonated his payload after smashing into a blast wall, flattening a small reception building and damaging the main two-story building 20 yards away, the officer said, adding that most of those killed and wounded were police.

And a US helicopter dropped flares on a crowd in a square in eastern Baghdad, hours after clashes between American troops and Shiite militia that left at least five people dead. The military said the flares were fired automatically by the Apache helicopter's defense system - not the crew.

Fighting broke out in the predominantly Shiite Fidhiliyah area on the Baghdad's outskirts late Friday after a US military convoy came under attack outside the local offices of Muqtada al-Sadr, the anti-American cleric whose Mahdi Army militia has recently stepped up attacks on American troops.

Spokesman Lt. Col. Christopher Garver said no Americans were killed or wounded, but he did not have immediate information on Iraqi casualties.

Sheikh Mohammed al-Hilfi, an al-Sadr representative from the office, said the clashes broke out after a raid on the office, which doubles as a mosque. The military did not confirm the raid.

He said seven people were killed and 21 wounded, while local police officials put the casualty figure at five killed and 19 wounded. The officials said those killed were Iraqis and included bystanders caught in the crossfire, while 16 other men were detained.

Hundreds of men chanted as they carried the wooden coffins draped in Iraqi flags of four people reportedly killed in the violence.

Associated Press Television video shot early Sunday showed a low-flying Apache helicopter firing flares as several hundred people, including teenagers and children, gathered around a destroyed US Humvee.

The US military on Sunday reported the deaths of three American troops. Among them were a US airman killed in a roadside bombing in southern Iraq; and two soldiers - one killed in Baghdad and another who died of injuries in Diyala Province.

The deaths raised to at least 3,506 members of the US military who have died since the Iraq war started in March 2003, according to an Associated Press count.

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