U.S. and Iraqi forces raided the stronghold of a Shiite militia led by a radical anti-American cleric in search of a death squad leader.
But the operation was disavowed by Prime Minister Nouri al-Maliki.
Al-Maliki, who relies on political support from the cleric Muqtada al-Sadr, said the strike against a figure in al-Sadr's Mahdi militia in Sadr City "will not be repeated."
But in Sadr City, protesters shouted "Maliki, you're a coward, you're the Americans' traitor," reports CBS News chief foreign correspondent Lara Logan.
Military incursions into Sadr City are never welcome. The sprawling Shiite slum in the northeastern corner of the capital is home to 3 million people, half the population of Baghdad.
The problem for al-Maliki is that Sadr City's streets belong to al-Sadr and his militia. In Sadr City, he's the people's hero.
Reining in al-Sadr's Mahdi army is one of the thorniest problems facing al-Maliki because his fragile, Shiite-dominated government derives much of its power from al-Sadr.
The Mehdi army helped put al-Maliki in power, and just last week he sought al-Sadr's help again — to rein in the violence.
Al-Maliki also slammed the top U.S. military and diplomatic representatives in Iraq for saying his government needed to set a timetable to curb violence in the country. At a news conference Tuesday, U.S. Ambassador Zalmay Khalilzad said al-Maliki had agreed.
"I affirm that this government represents the will of the people, and no one has the right to impose a timetable on it," al-Maliki said at a news conference.
The prime minister dismissed U.S. talk of timelines as driven by the upcoming midterm elections in the United States. "I am positive that this is not the official policy of the American government, but rather a result of the ongoing election campaign. And that does not concern us much," he said.
In Washington, President Bush sought to delineate a middle ground in terms of pressing the Iraqis to accept more responsibility for their own fate.
"We are making it clear that America's patience is not unlimited," he said. "We will not put more pressure on the Iraqi government than it can bear."
Tank cannons boomed out over the city five times in rapid succession Wednesday, and U.S. F-16 jet fighters screamed low overhead as the conflict in Sadr City continued into the day.
Four people were killed and 18 wounded in overnight fighting in the overwhelmingly Shiite eastern district, said Col. Khazim Abbas, a local police commander, and Qassim al-Suwaidi, director of the area's Imam Ali Hospital.
Iraqi army special forces, backed by U.S. advisers, carried out a raid to capture a "top illegal armed group commander directing widespread death squad activity throughout eastern Baghdad," the military said.
Al-Maliki, who is commander in chief of Iraq's army, heatedly denied he knew anything about the raid.
"We will ask for clarification about what has happened in Sadr City. We will review this issue with the multinational forces so that it will not be repeated," he said. "The Iraqi government should be aware and part of any military operation. Coordination is needed between Iraqi government and multinational forces."
Mr. Bush acknowledged that al-Maliki may not have been consulted beforehand.
"There's a lot of operations taking place, which means sometimes communications are not as good as they should be. And we'll continue to work very closely with the government to make sure communications are solid," he said.
As the raid began, Iraqi forces were fired on and asked for U.S. air backup. The U.S. said it used "precision gunfire only to eliminate the enemy threat," according to the military's statement.
There was no word on casualties or whether the targeted death squad leader was captured.
Residents near Sadr City said gunfire and air strikes began late Tuesday night and continued for hours. The district was sealed to outsiders Wednesday.
Groups of young men in black fatigues favored by the Mahdi army were seen driving toward the area to join the fight.
Explosions and automatic weapons fire were heard above the noise of U.S. helicopters circling overhead and firing flares. Streets were empty and shops closed.
In his comments, al-Maliki also appealed to neighboring states to stop meddling in Iraq's domestic affairs — an apparent reference to Iran and Syria, which are accused by the United States and Iraqi officials of aiding Sunni and Shiite armed groups.
He blamed foreign fighters in groups such as al Qaeda in Iraq and loyalists of former dictator Saddam Hussein's Baath Party regime for driving the current violence that takes the lives of around 40 Iraqis every day, and possibly many more.
"I would like to state here that the root of the battle we are fighting in Iraq and the root of the bloody cycle that we are undergoing is the presence of terror organizations that have arrived in the country," al-Maliki said.
Al-Maliki has repeatedly pledged to deal with the militias, but has resisted issuing firm ultimatums or deadlines.
His comments followed remarks Tuesday by Gen. George Casey, the top American commander in Iraq, and Khalilzad, who said Iraqi leaders had agreed to a timeline for achieving key political and security goals, including reining in such groups.
Khalilzad revealed neither specific deadlines for achieving those goals nor penalties for their failure to do so, and al-Maliki said no deadlines had been put to his government.
"I would like to assert that everyone knows my government is a government that came to power through the will of the people. And it is no one's business to give it timelines," he said.
The timeline plan outlined by Khalilzad was believed to have grown out of recent Washington meetings at which the Bush administration sought to reshape its Iraq policy amid mounting U.S. deaths and declining domestic support for the 44-month-old war. The plan was made public a day after White House spokesman Tony Snow said the United States was adjusting its Iraq strategy but would not issue any ultimatums.
Khalilzad said al-Maliki had agreed to the timeline concept that called for specific deadlines to be set by year's end. U.S. officials revealed neither specific incentives for the Iraqis to implement the plan nor penalties for their failure to do so.
October has been the deadliest month this year for American forces. The military Tuesday announced the deaths of two more Marines, a sailor and a soldier. Since the war began, 2,801 U.S. service members have died in Iraq, according to an Associated Press count.
The military said it was continuing a search for a U.S. Army translator missing after he was believed to have been kidnapped Monday night in Baghdad. Troops had detained some suspects who "could possibly be involved," said a spokesman, Lt. Col. Jonathan Withington.
Police in the southern city of Kut recovered the bodies of seven men bearing signs of torture typical of victims of sectarian death squads.
Scattered violence continued elsewhere, with six people killed when a roadside bomb destroyed their vehicle in Balad Ruz, about 40 miles northeast of Baghdad. Other mortar and bomb attacks in the area wounded several people.