Al-Sadr loyalists say the deadly clashes took place in and around a mosque in a Shi'ite neighborhood of the Iraqi capital.
The U.S. military says Iraqi forces, backed by U.S. advisers, killed 16 insurgents in an operation in the same neighborhood. The U.S. military says no mosque was involved in the fighting.
Iraqi Prime Minister Ibrahim al-Ja'fari has called for an investigation to determine the true facts of what happened.
In other news, police found 12 bodies in Baghdad overnight and today. Nine of the bodies were found in west Baghdad with ropes around their necks. The bodies of two men and a woman -- all shot in the head -- were found in east Baghdad.