A military spokesman said the soldiers started shooting when a car came too close to an American armored patrol.

An American soldier in the lead vehicle of the convoy fired a warning shot to make the Iraqi vehicle move away, but its occupants returned fire on the convoy and sparked the gun battle.

In a separate attack in Baghdad, a suicide bomber dressed as a policeman blew himself up at the heavily guarded headquarters of a feared commando unit.

Five people have died from that attack.

Also, two Oil Ministry employees were shot and killed in a southern district of Baghdad.