Iraqi forces battled with Shia militia today for control of the southern oil port of Basra.
The violence in which at least 20 people died was part of an escalating confrontation between the government and Shia cleric Muqtada al Sadr's followers, but British troops now based outside at the city's airport were not involved.
Al Sadr declared a unilateral cease-fire last August which, along with a US troop building and a Sunni alliance with the American forces, has contributed to a steep drop in violence over the past several months.
But the truce frayed as al Sadr's allies grew increasingly angry over US and Iraqi raids and detentions and demanded the release of followers rounded up in recent weeks.
The cleric recently told his followers that although the truce remains in effect, they were free to defend themselves against attacks.
Al Sadr's headquarters in Najaf also ordered field commanders with his Mahdi Army militia to go on maximum alert and prepare "to strike the occupiers" - a term used to describe US forces - and their Iraqi allies.
Politicians from al Sadr's movement announced in a Baghdad press conference that a civil disobedience campaign - which began in selected districts of the capital and included the closure of businesses and schools - was being expanded across the country.
Stores and schools were closed in several other predominantly Shiite neighborhoods in the capital, apparently in compliance with the civil disobedience order. Armed Mahdi Army members were seen patrolling the streets in some Shiite neighborhoods of the capital.
In Basra, until last year controlled by British forces, Iraqi soldiers and police battled Mahdi fighters for control of key districts.
The fighting erupted a day after Prime Minister Nouri al-Maliki flew there and announced the security crackdown against the militias.
Basra, Iraq's second-largest city, accounts for most of its oil exports, but an oil ministry official said production and exports had not been affected by the fighting.
Curfews were also imposed in the Shiite cities of Kut, where a large number of Mahdi Army gunmen were seen deploying on the streets, and Nasiriyah.
In Baghdad, suspected Mahdi Army gunmen exchanged gunfire with security guards of the rival Shiite Supreme Islamic Iraqi Council in Sadr City.
The rising tension led many in Shiite neighborhoods to stay at home rather than venture into contested streets.
Security in Basra had been steadily declining well before Britain handed over responsibility for security to the Iraqis on December 16.
British troops remained at their base at the airport outside Basra and were not involved in the ground fighting.
Last month, a British journalist working for CBS and his Iraqi interpreter were kidnapped from a hotel. The Iraqi was released after al-Sadr's office negotiated a deal, but the Briton remains in custody.
In other violence, two bombs exploded in central Baghdad, killing one civilian and wounding eight others, and a US-allied Sunni fighter also was killed in a drive-by shooting north-east of the capital, police said.