The raid came two days after anti-American Shiite cleric Muqtada al-Sadr emerged from hiding with a call for Sunnis and Shiites to band together to force foreign troops out of Iraq.

Sadr's Mahdi Army militia has repeatedly battled with US and British troops in the streets of Sadr City and Basra.

On Friday, just hours after Sadr delivered a sermon in the holy Shiite city of Kufa, British and Iraqi troops killed the Mahdi Army commander in Basra in a gunfight.

Militants responded with attacks on British troops and Iraqi forces there.

The attacks continued late on Saturday night and early on Sunday when British camps in the city were shelled repeatedly, British troops said in a statement.

The British, meanwhile, carried out an arrest raid early on Sunday when their forces were attacked with roadside bombs, rocket-propelled grenades and small arms fire, the British said.

The troops returned fire, killing three of their attackers.

No British forces were injured.

The troops also arrested four militants.