Prime Minister Nouri al-Maliki pledged "no retreat" Thursday in the fight against Shiite militias in the southern city of Basra, as thousands of protesters demanded he resign over the crackdown and extremists fired rockets into the U.S.-protected Green Zone.
Shiite militia leader Muqtada al-Sadr called Thursday for a political solution to the burgeoning crisis and an end to the "shedding of Iraqi blood." But the statement, released by a close aide, stopped short of ordering his Mahdi Army militia to halt attacks on the Green Zone or stop fighting in Basra, Iraq's second-largest city.
In a sign of the deteriorating security, gunmen in Baghdad seized a high-profile government spokesman from his home in a Shiite neighborhood, killing three of his bodyguards and torching his house. In a bid to curb the violence, Iraq's military ordered vehicles and pedestrians off the streets of the capital until Sunday morning.
As Americans and Iraqis scrambled to cope with a newly violent Iraq, the State Department ordered all personnel at the U.S. Embassy not to leave reinforced structures because of continued incoming rocket or mortar fire from suspected Shiite extremists angry over the Basra crackdown.
There's no sign in Basra of the soldiers or police that Iraq's Prime Minister sent to reclaim this important oil-rich city, and residents told CBS News chief foreign correspondent Lara Logan by phone that Al-Sadr's Mahdi Army militia now controls several districts.
The campaign to rid Basra of lawless gangs and Shiite militias - some believed tied to nearby Iran - is a major test for al-Maliki, a Shiite, and for the Iraqi military. The ability of Iraqi leaders and security forces to control situations like this one is key to U.S. hopes of withdrawing its forces from the country.
The prime minister put his credibility on the line by flying down to Basra and issuing a weekend deadline for the surrender of Mahdi Army militiamen loyal to al-Sadr. But the militiamen were still controlling Basra's streets Thursday, and the security operation has triggered a violent response among al-Sadr's followers in Baghdad and cities throughout the Shiite heartland of southern Iraq.
In the Baghdad neighborhood of Kazimiyah, thousands of al-Sadr's followers denounced al-Maliki as a "new dictator" as they carried a coffin bearing a crossed-out picture of the U.S.-backed prime minister. Thousands more also rallied in Sadr City, Baghdad's main Shiite district.
"We call on our brothers in the Iraqi army and the brave national police not to be tools of death in the hands of the new dictatorship," a Sadrist member of parliament, Falah Shanshal, said.
However, al-Maliki showed no sign of wavering.
"We have made up our minds to enter this battle, and we will continue until the end. No retreat," al-Maliki told Basra area tribal leaders in a speech broadcast nationwide on Iraqi state TV.
Al-Maliki said Iraq had become a "nation of gangs, militias and outlaws" and he was undertaking a "historic mission" in Basra to restore "the law of the land."
But the Sadrists have been angry over recent raids and detentions, saying U.S. and Iraqi forces have taken advantage of their 7-month-old cease-fire to crack down on the movement.
They have accused rival Shiite parties, which control Iraqi security forces, of engineering the arrests to prevent them from mounting an effective campaign for provincial elections expected this fall. The Sadrists expect to make major electoral gains at the expense of rival parties, including those that maintain close ties to the United States.
American officials have acknowledged that the unilateral cease-fire declared by al-Sadr last August played a major role in reducing violence in Baghdad. U.S. and Iraqi officials have insisted that they are not targeting al-Sadr's movement but simply going after renegades, criminals and extremists with ties to Iran.
What U.S. officials won't admit to publicly but say in private, is that this fight has been long in coming because their British allies who had controlled the south, failed to stop Iran themselves, reports Logan.
Fighting raged for a third straight day in Basra, where Iraqis have been of control of security since the British withdrew last December.
Heavy gunfire and explosions resounded across the city while helicopters and jet fighters buzzed overhead. The city's police chief escaped an assassination attempt late Wednesday but three of his guards were killed in the roadside bombing.
Residents contacted by telephone in Basra, the country's oil capital 340 miles southeast of Baghdad, spoke of militiamen using mortar shells, sniper fire, roadside bombs and rocket-propelled grenades to fight off security forces.
Some complained that thousands of civilians were trapped by the fighting and running short of food, medicine and clean drinking water.
At least 56 people have been killed since Wednesday in Basra, according to police and hospital reports, although a complete and accurate count was impossible to obtain because of the fighting.
In an escalation of the crisis, saboteurs bombed one of Iraq's two main oil export pipelines that carries crude oil from Basra to the country's oil terminal on the Persian Gulf. The attack briefly sent prices rising on international petroleum markets.
In Baghdad, suspected Shiite extremists continued to hammer the U.S.-protected Green Zone on Thursday, firing several rounds of rockets or mortars that sent a huge plume of smoke above the heavily fortified area in central Baghdad.
Also Thursday, a U.S. soldier was killed by a roadside bombing in mostly Shiite eastern Baghdad, the U.S. command said. No further details were released.
One American, a government employee, died in Thursday's attacks on the Green Zone, four days after an American financial analyst was mortally wounded there.
A memo sent to embassy staff and obtained by The Associated Press says employees are required to wear helmets and other protective gear if they must venture outside and strongly advises them to sleep in blast-resistant locations instead of trailers that most occupy.
Pentagon officials said Thursday that weapons used in recent Green Zone attacks included 107mm rockets made in Iran. One official, speaking on condition of anonymity because of the sensitivity of the information, said some rockets were stamped with 2007 Iranian manufacture dates.
With security in Baghdad rapidly deteriorating, gunmen kidnapped the Iraqi civilian spokesman for the Baghdad security operation and killed three of his bodyguards after torching his house in a Shiite neighborhood.
The spokesman, Tahseen Sheikhly, is a Sunni who often appeared with U.S. military and embassy officials at news conferences to tout the successes of the security operation, which began last year when President Bush sent 30,000 U.S. reinforcements to Baghdad.