The fighting occurred in Sadr City's Fadhailiya district, scene of several clashes between U.S.- and Iraqi-led forces and supporters of rebel Shiite cleric Moqtada Sadr, CNN reported.

Since a cease-fire was reached this month, violence in Sadr City has dropped, the Interior Ministry official said.

Police reported at least four people were killed and 46 hurt Tuesday when a car bomb detonated in Talafer in northern Iraq.

The explosion occurred in a crowded market, a local police officer told Xinhua. Women and children were among the victims, police told the Chinese state-run news agency.

Talafer is about 40 miles west of Mosul, considered to be the last urban location where al-Qaida holds sway, Xinhua said. Just days earlier, U.S. Ambassador to Iraq Ryan Crocker said he believed coalition security forces are closer than ever to defeating al-Qaida, though U.S. Navy Rear Adm. Patrick Driscoll said Sunday the insurgency is still a serious obstacle to peace.