The Iraqi army is fighting the Mehdi Army Shia militia in the streets of Basra after the government launched its most serious offensive to gain control of the southern oil city.
Clouds of dark smoke rose over Basra 340 miles south of Baghdad as Iraqi soldiers tried to take control of the main roads while black-clad militiamen fought back from the alleyways. "There are clashes in the streets," said Jamil, a resident of the city. "Bullets are coming from everywhere and we can hear the sound of rocket explosions."
The fighting was spreading across Shia areas of Iraq as the radical cleric Muqtada al-Sadr, the leader of the Mehdi Army, called for a campaign of civil disobedience in which shops, businesses, schools and universities would close down.
In the Sadrist stronghold of Sadr City, home to two million people in Baghdad, police and army checkpoints were simply abandoned and militiamen took over. In a statement read out by a senior aide yesterday, Mr Sadr called on Iraqis to stage sit-ins all over the country and added that he would declare "a civil revolt" if attacks by US and Iraqi security forces continued. Civil disobedience is different in Iraq from most countries, since most protesters are armed or have weapons available.
The Iraqi Prime Minister, Nouri al-Maliki, has moved to Basra, where he is said to be supervising the operation, in which 22 people have been killed and over 100 wounded so far. It is unlikely, however, that the Iraqi army assault would have been launched without the support of the American military, whose jets and helicopters are providing air support.
The Sadrist headquarters in the Shia holy city of Najaf has ordered the Mehdi Army field commanders to be on maximum alert and prepare "to strike the occupiers", which means attacking US forces. If they do so it would mean the end of the ceasefire declared by Mr Sadr on 29 August last year and renewed in February.
It is this truce which US commanders have said contributed significantly to the fall in violence in Iraq over the past six months. Rockets fired from Shia areas of Baghdad pounded the American-protected Green Zone yesterday.
Basra has been increasingly controlled by Shia militias since the fall of Saddam Hussein in 2003. British forces were never able to establish their authority over the city and finally handed over security control to Iraq on 16 December last year, saying that the British presence was provoking rather than reducing violence.
Mr Maliki has declared that the government is intending to restore law and order in Basra but the Sadrist movement, the most powerful Shia mass movement, will see the offensive as an attempt by its Shia rivals in the Islamic Supreme Council of Iraq to displace them. If there is an all-out confrontation, the Iraqi army might well look to support from the United States and Britain, initially through air strikes. So far British forces have not been involved in the fighting.
The US has been eager for the central government to regain control of Basra, which sits on top of Iraq's oil reserves and is also close to the American army's main supply line that runs west of the city up the main highway from Kuwait to Baghdad. Basra has hitherto been run by competing local warlords, each of whom has been seeking to gain control of valuable local concessions and rackets such as fuel and the ports of Basra and Umm Qasr. One Iraqi businessman who dispatched a container from Umm Qasr port to Arbil in Iraqi Kurdistan says he paid $500 (£250) in transport costs and $3,000 in bribes to ensure safe passage.
Mr Sadr has been keen to avoid an all-out military confrontation with the US army or Iraqi units backed by the Americans ever since he fought the US Marines in Najaf in 2004. Although his Mehdi Army militiamen suffered heavy losses because of the American force's superior arms, they showed that they were prepared to fight to the end. In the warren of slums in Basra, they could do the same and they could also spread the fighting across the overwhelmingly Shia south of Iraq.