More than 300 people are believed to have died in two days of heavy fighting between foreign troops and Shiite Muslim militiamen as US planes pounded the central Iraqi holy city of Najaf on Friday.
In the worst clashes since a June truce quelled a spring uprising spearheaded by radical Shiite leader Moqtada Sadr, the US military said 300 insurgents were killed.
"We estimate we've killed 300 anti-Iraqi forces in the past two days of fighting. We've had a total of three killed, 12 wounded," Marine Captain Carrie Batson said, referring to the intense Najaf clashes.
Medics and police had reported more than 50 killed, with more than 170 wounded as the unrest fanned out across Shiite central and southern Iraq, with insurgents targeting British-led troops in Basra and Amara and the Italians in Nasiriyah.
The interim government declared war on all illegal militias and vowed that the offensive in Najaf would be extended elsewhere.
In Najaf, residents stayed at home with their doors bolted as fighters loyal to Sadr prowled the streets.
US planes fired rockets over the city and its cemetery, a Sadr stronghold which suffered some of the worst fighting during his Mehdi Army's first standoff with foreign troops in the spring.
Explosions and gunfire crackled across the holy city for hours, before a lull at lunchtime on the Muslim day of rest. Dozens of US tanks and armoured vehicles drove into the city.
In a message read out on his behalf at Friday prayers in Najaf's twin city of Kufa, Sadr declared the United States his enemy.
"The Iraqi president said 'America is our friend', but I say 'America is our enemy'," Sheikh Jaber al-Khafaji told worshippers on the cleric's behalf.
Sadr also warned Iraqi security forces against fighting alongside multinational troops.
"I warn Iraqi police not to attack any peaceful demonstration," Khafaji told worshippers at Kufa's main mosque on behalf of the cleric.
The military said two US marines were killed in the province on Thursday, bringing to more than 680 the number of US troops killed in action in Iraq since last year's US-led invasion.
So far, medics in Najaf have reported 15 dead and more than 40 wounded, with three bodies brought to a hospital in Kufa.
Further south in Nasiriyah, seven civilians were killed and 13 wounded in overnight clashes between the Mehdi Army and Italian troops, police said.
Four people died, including a woman who was about to give birth, when an ambulance was blasted in the crossfire, said Captain Hussein al-Shuaili.
In Baghdad, medics reported at least 26 people killed and 90 wounded during clashes in the huge Shiite neighbourhood of Sadr City, another stronghold of radicals. At least six US soldiers were also hurt, the military said.
In the main southern city of Basra, Sadr representative Sheikh Saad al-Basri, who has declared war on British troops, said five people were killed and three wounded in fresh clashes.
Multinational troops continued to come under mortar and rocket-propelled grenade fire in Basra, Amara and Nasiriyah on Friday, but there were no casualties, a British spokesman said.
Deputy provincial governor and Sadr loyalist, Salem Audeh, vowed the fight would continue in Basra until the situation in Najaf returns to normal.
The US-backed government also said it would take all necessary steps to rid the country of militias, which it has insisted be disbanded.
"All those who don't do this, we call them terrorists, criminals and they are against the law. Therefore, we will take all necessary steps," said government spokesman Gurgis Sada.
Asked whether the campaign against the Mehdi Army could be extended to the Sunni insurgent bastions of Fallujah, Ramadi and Samarra, Sada said: "This concerns everywhere."
When pressed, he answered: "Do you want me to repeat it? Anywhere. Anytime. Whoever."
Tensions have run high between Sadr, US forces and the government, despite a ceasefire agreement that drew a line under his uprising earlier this year.
Amid the violence, a UN adviser in Baghdad and Iraq's main Shiite political party, the Supreme Council for the Islamic Revolution in Iraq, called for restraint and a peaceful solution to the fighting.
In Samarra, two civilians were killed as US forces, backed by air power, fought armed insurgents overnight, medics said.
Troops killed three rebels in a series of raids, dubbed Operation Cajun Mousetrap II, designed to kill or capture insurgents, the US military said.
From rice to rags in heart of Iraq's parched breadbasket