Police Capt. Laith Mohammed said the attack near Balad, 50 miles north of Baghdad, involved U.S. warplanes and armor that flattened a house in the village of Isahaqi.
An Associated Press reporter at the scene said the roof of the house had collapsed, three cars were destroyed and two cows were killed.
The 11 victims were wrapped in blankets and driven in three pickup trucks to the Tikrit General Hospital, about 45 miles to the north, relatives said.
AP photographs showed the bodies of two men, five children and four other covered figures arriving at the hospital accompanied by grief-stricken relatives. The victims were covered in dust with bits of rubble tangled in their hair.
The U.S. military said the target of the raid was a man suspected of supporting foreign fighters of the al Qaeda in Iraq terror network, and he was captured.
"Troops were engaged by enemy fire as they approached the building," said Tech. Sgt. Stacy Simon, a military spokeswoman. "Coalition forces returned fire utilizing both air and ground assets."
Riyadh Majid, who identified himself as the nephew of Faez Khalaf, the head of the household who was killed, told AP at the hospital that U.S. forces landed in helicopters and raided the home early Wednesday.
Khalaf's brother, Ahmed, said nine of the victims were family members who lived at the house and two were visitors.
"The dead family was not part of the resistance, they were women and children," he said. "The Americans have promised us a better life, but we get only death."
In other recent developments:
Monday marks the end of the 40-day mourning period after the death of Imam Hussein in 680 A.D. He was the grandson of the Prophet Muhammad and was killed in Karbala in present-day Iraq, now the site of massive Shiite pilgrimages to mark the date.
Authorities in one of the Shiite holy cities, Karbala, imposed a six-day driving ban starting Thursday in a bid to protect pilgrims this year.
Gen. George W. Casey, commander of U.S. forces in Iraq, also linked the deployment to the attempt to form a government.
"I have discussed this with the Iraqi prime minister, and we found it prudent to provide this additional support. This short-term deployment will make a long-term contribution to Iraq's security and political progress," Casey said in a statement.
Continuing divisions among lawmakers over the government suggested the Thursday session of the legislature may do little more than swear in members elected in landmark elections three months earlier.
There was little sign of progress after a second full day of meetings among leaders of the major political blocs, sessions brokered by U.S. Ambassador Zalmay Khalilzad and designed to speed agreement on the shape of the next government.
"I expect that there still will be difficulties over choosing the prime minister," said Mahmoud Othman, a Kurdish politician who was in Wednesday's session.
Khalilzad has been pressing political leaders to reach agreement on a national unity government, under which the country's majority Shiite Muslims would share Cabinet posts equitably with minority Sunnis and Kurds.
The Americans see that as the best opportunity for blunting the insurgency that has ravaged the country since 2003. If a strong central government were in place, Washington had hoped to start removing some troops by summer.
Under the constitution, the largest parliamentary bloc, controlled by Shiites, has the right to nominate the prime minister. The Shiites named the current prime minister, Ibrahim al-Jaafari.
Politicians involved in the negotiations have said part of the Shiite bloc, those aligned with Abdul-Aziz al-Hakim, would like to see al-Jaafari ousted but fear the consequences, given his backing from radical cleric Muqtada al-Sadr and al-Sadr's thousands-strong Mahdi Army.
President Jalal Talabani, a Kurd, has sought to capitalize on the division among the Shiites by forming a coalition with Sunni politicians and some secularists to increase pressure against al-Jaafari's candidacy.
Al-Hakim, who has close ties to Iran through his Supreme Council for the Islamic Revolution in Iraq, issued a call Wednesday for Tehran to open a dialogue with the United States.
"I demand the leadership in Iran to open a clear dialogue with America about Iraq. It is in the interests of the Iraqi people that such dialogue is opened and to find an understanding on various issues," he said without elaborating.
He also endorsed the hot-button issue of dividing the country into autonomous zones for Kurds, Shiites and Sunnis. He said the divisions would "ensure that we (Shiites) will not be marginalized and to provide security. So that every region can protect its people."
The continuing deadlock makes it impossible to move forward with selecting Cabinet ministers, even as Thursday's first session imposes a 60-day deadline for forming the government.
If that cannot be done, the constitution calls for al-Jaafari to step aside in favor of a new candidate, and the process starts over.