US military sources say that a total of 54 Iraqis were killed after an attempt to ambush two convoys delivering new currency to banks on Sunday.
The firefight in the northern city of Samarra saw two heavily-armed convoys come under simultaneous attack from gueriilas, many of whom were wearing the uniforms of Saddam's Fedayeen paramilitary force.
US spokesman Lieutenant Colonel William MacDonald said: "The 4th Infantry Division repelled multiple ambush attacks.
"In all of the clashes coalition firepower overwhelmed the attackers resulting in significant enemy losses. If you attempt to attack one of our convoys we're going to use our firepower to stop that attack."
The scars of the battle were still evident on Monday. About a dozen cars lay destroyed in the streets, many apparently crushed by tanks, and bullet holes pocked many buildings. A rowdy crowd gathered at one spot, chanting pro-Saddam slogans. One man fired warning shots in the air when journalists arrived at the scene.
Some residents claimed that the Americans opened fire at random when they came under attack, and targeted civilian installations.
At the nearby American army base, half a dozen suspects were seen with bags over their heads and their hands bound by plastic cuffs.Reuse content