There were conflicting reports about what triggered the clashes, which underscored the rising tensions between Shi'ite and Sunni Muslim communities that threaten to plunge Iraq into civil war.
The US military said trouble began before dawn Monday when gunmen fired on an Iraqi Army patrol. Fighting escalated four hours later when 50 gunmen assaulted a US-Iraqi police checkpoint, prompting US and Iraqi reinforcements to rush to the scene, a US statement said.
Although the clashes ended Monday afternoon, they broke out again before dawn yesterday when rumors swept Azamiyah that paramilitary commandos from the Shi'ite-led Interior Ministry had entered the area.
Many Sunnis consider Interior Ministry commandos, many of them veterans of the Shi'ite Badr Brigade militia, as little more than sectarian death squads responsible for kidnapping and killing hundreds, possibly thousands, of Sunni civilians during the past year.
''Just after 6 a.m., the mosques began calling 'Allahu Akbar' [God is great] over and over, which is the signal that there's trouble, that the neighborhood is under attack," one resident, Riyadh Zoheir, said by telephone from Azamiyah.
As the alarm sounded, masked gunmen took up positions on rooftops, firing at military vehicles. Gangs of armed men roamed from house to house, urging Sunni families to provide male members to help defend the neighborhood, residents said.
Defenders included members of a neighborhood watch group formed after the Feb. 22 bombing of a Shi'ite shrine in Samarra. The bombing triggered reprisal attacks against Sunni mosques and clerics, raising the specter of all-out sectarian war.
Several of the dead were members of the watch force, residents said.
''They came in wearing police clothes, but they weren't police," a watch group member said, speaking on condition of anonymity for fear of reprisal. ''We defended our neighborhood, our mosques, and our honor."
Rumors spread that some of the outsiders included armed men ''who did not speak Arabic well -- meaning they were Iranians or Iranian-Iraqis," Zoheir said, referring to young Shi'ites who grew up in Iran and returned after Saddam Hussein's fall.