The Al-Jazeera television network broadcast images of demonstrators shouting, "Victory to the Al-Mahdi Army" -- a Shi'ite militia loyal to radical Shi'ite cleric Muqtada al-Sadr. Officials say that the Al-Mahdi Army is known to have weapons capable of bringing down a helicopter.
The British Defense Ministry released a statement confirming that five soldiers had been killed in the incident.
Today, troops maintain a security cordon around the crash site, in the city center close to the provincial governor's offices. Iraqi troops and police kept a heavy presence throughout the city after an overnight curfew.
Mahdi Saleh, owner of one of the houses damaged by the helicopter, told Reuters news agency today: "British troops have cordoned off the area. I can't move anywhere; I can't even go to my neighbor's house. They are not allowing anyone to move. They wounded some children. They killed four people. There are also many injuries."
A doctor at an Al-Basrah hospital, Haidar al-Mousawi, told Reuters that mostly young people were involved in the incident.
"We received 33 casualties at this hospital -- 29 were injured and four dead upon arrival at the hospital. Many of the casualties were children who were hurt by shrapnel from mortar fire. Some were wounded in the stomach and some in the chest. All the casualties were male, there are no female casualties, but as I said earlier, most of the casualties are children and youth," al-Mousawi said.
Iraqi President Jalal Talabani wrote to British Prime Minister Tony Blair to express his condolences, describing the deaths of those on the helicopter as a "vile crime".
The incident brings to 109 the number of British servicemen killed in Iraq since the start of the war in March 2003.
Britain has about 8,000 troops in the Al-Basrah area. Southern Iraq has long been much less violent than Baghdad and western Iraq.
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SUNNI, SHI'A: Iraq is riven along sectarian lines, faults that frequently produce violent clashes and are a constant source of tension. Sectarian concerns drive much of Iraqi politics and are the main threat to the country's fragile security environment.