The clash occurred late Wednesday after rebels detonated a car bomb near a U.S. outpost in the restive northern Iraqi city. As reinforcements arrived, they came under fire by guerrillas using automatic weapons and rocket-propelled grenades, military spokesman Staff Sgt. Don Dees said.
The Americans then called in an airstrike by warplanes which attacked some 50 insurgents at the Yarmouk traffic circle, Dees said.
"Initial estimates indicate that there were 25 (insurgents) killed," Dees said. Fifteen U.S. soldiers were wounded.
Mosul, Iraq's third-largest city, has become a hotbed of insurgent activity in the past several months.
Fourteen U.S. soldiers died Dec. 21, when a suicide bomber walked into a mess tent in Mosul packed with soldiers having lunch. In all, 22 people were killed and dozens wounded in the blast. The radical Ansar al-Sunnah Army claimed responsibility for the attack.
In other developments:
The latest clash in Mosul came as U.S. troops launched a new offensive in an area south of the capital dubbed the "triangle of death," in an apparent effort to secure the region ahead of crucial parliamentary elections on Jan. 30.
Brig. Gen. Jeffery Hammond, assistant commander of the 1st Cavalry Division that controls Baghdad, said Wednesday that U.S. troops were focusing on areas around Mahmoudiya, a town about 25 miles south of the capital.
U.S. and Iraqi forces have come under repeated attacks by car bombs, rockets, and small arms fire in the area, dubbed the "triangle of death." The latest operation followed a weeklong campaign in November and early December to root out insurgents in the same region.
The latest fighting came as an insurgent group that claimed responsibility for the Dec. 21 suicide bombing of the U.S. base warned Iraqis not to take part in next month's parliamentary elections.
"We also warn everyone to keep away from all military targets, whether they were bases, American Zionist patrols, or the forces of the pagan guard, and police," Ansar al-Sunnah said in a statement released Wednesday.
The warning followed Monday's audiotape statement from al Qaeda leader Osama bin Laden urging Iraqis to boycott the elections and praising attacks against Americans and those who cooperate with them.
President Bush denounced bin Laden's appeal, saying the election marks a crossroads for Iraq.
"The stakes are clear in this upcoming election," Bush told reporters at his Texas ranch. "It's very important that these elections proceed."
Insurgents have intensified their strikes against the security forces of Iraq's U.S.-installed interim government as part of a continuing campaign to disrupt the elections for a constitutional assembly.
Government troops are supposed to protect polling stations, and the insurgents' strategy — which includes attacking police stations, checkpoints and patrols — appears aimed at demonstrating the security forces are incapable of handling the job.
On Wednesday morning, militants ambushed an elite Iraqi police unit in a Baghdad neighborhood known for its loyalty to ousted dictator Saddam Hussein, killing 29 people, most of them civilians.
The militants set off a huge explosion in the staunchly Baathist neighborhood of Ghaziliya as a contingent of special police and national guards were about to raid a house after receiving an anonymous tip. The blast killed 22 civilians and seven officers, and damaged a dozen nearby homes, a police spokesman said.