Iraqi authorities say U.S. and Iraqi forces are battling gunmen in Baghdad's Sadr City district, leaving at least 22 people dead.
The fighting erupted Sunday in a neighborhood where radical Shi'ite cleric Moqtada al-Sadr has many armed loyalists.
Officials say at least 78 people, including women and children, are wounded.
The Jamila market - one of Baghdad's biggest food bazaars - was set ablaze during the clashes.
U.S. military spokesman, Colonel Steve Stover accused criminals of firing missiles at the market. He said that earlier today, U.S. helicopters attacked and killed nine "criminals" in the area.
Authorities have enforced a vehicle ban on Sadr City since deadly street fighting erupted between al-Sadr's militia and Iraqi and foreign forces late last month.
The cleric called a ceasefire last week.
The latest fighting broke out a day after Iraq's Political Council for National Unity called for militias to disband and hand over their weapons to the government.
The council is made up of Iraq's president, prime minister and the heads of political blocs in parliament.
Elsewhere in Iraq, officials say Iraqi security forces have freed 42 university students who were kidnapped by gunmen near the northern city of Mosul Sunday.
Also today, mourners gathered in a Baghdad church for the funeral of a Christian priest killed by gunmen in the Karradah district Saturday.
Many Iraqi Christians are believed to have fled the country because of attacks and threats from Islamic extremists.
Some information for this report was provided by AFP, AP and Reuters.