Fighting between British soldiers and armed supporters of the radical cleric Muqtada Sadr has eased around Basra.
At least two Iraqis were killed and seven UK troops injured
Hundreds of militants set up roadblocks and tried to prevent people entering or leaving the city in a day of clashes.
The Ministry of Defence said at least two Iraqis died and seven UK troops were wounded in the violence in both Basra and nearby Amarah.
None of the injuries were described as life-threatening. The MoD said calm was restored with the help of Iraqi police.
"A number" of arrests were made.
The violence came a day after Mr Sadr's representative in Basra offered money for the capture or killing of coalition troops.
This, in turn, was seen as a response to newspaper pictures allegedly showing Iraqi prisoners being abused by coalition troops.
Witnesses said the militia attacked important buildings in Basra including the main oil company headquarters and the governor's office - where they were beaten back by British troops and Iraqi police.
A military spokesman told BBC News the militia set up burning barricades and fought sporadic gun battles with the troops, fighting them with rocket-propelled grenades and rifles.
A spokesman also told the AFP agency hundreds of members of the militia mingled with
demonstrators during the day and fired at British army and
Iraqi police patrols.
British army and medics in Iraq told AFP the number of casualties was as high as five members of Mr Sadr's Mehdi Army militia killed and nine British troops wounded.
Major Ian Clooney, a spokesman for British troops in Basra, told BBC News the militia did not represent the majority of the Basra population.
"The majority of the population, all they seek is a safe and secure environment. These extremists are very much the minority."
The escalation in fighting came as US troops stepped up the pressure on Mr Sadr.
His militiamen have suffered dozens of casualties fighting coalition troops around the holy cities of Najaf and Karbala.
In Basra, Sunday Times reporter Stephen Grey said he was woken by the sound of about eight explosions.
He said there had been sporadic gunfire in the city.
"This is a very organised attempt to try and take over the city this morning, albeit apparently unsuccessful," he said
The British military said calm was restored with the help of Iraq police
"The message in the mosque from Sadr's representative here was calling for people to come out on the streets today.
"They were combing the city trying to collect weapons from civilians."
British troops also raided Mr Sadr's office in Amarah after a convoy
was attacked and three British soldiers slightly wounded.
Militiamen fought back, and in the ensuing fighting Dr Saad Fakruddin at Amarah's hospital said three militiamen were killed and six "others" injured.
Witnesses said the British troops later left the office but
reported a number of British tanks and armoured vehicles remained
On Friday Mr Sadr's top aide in Basra, Sheikh Abdul-Sattar
al-Bahadli, told worshippers at Basra's al-Hawi mosque he would give $350 to anyone who captured a British soldier and $150 for killing one.
He also said any Iraqi who took a female soldier could keep her as a slave or gift to himself.
It is not the first time Mr Sadr's supporters have tried to take the governor's office.
In April they occupied it for one day and withdrew after a gun battle.