<B>FEROCIOUS</B> gun battles killed seven American soldiers in Baghdad and more than 20 people near the city of Najaf, posing an unprecedented challenge to occupation forces ignited by their attempts to crack down on a radical Shi?ite faction.

Most previous attacks on coalition troops since they occupied Iraq a year ago have been by fighters drawn from Iraq?s Sunni Muslim minority rather than majority Shi?ites.

In Baghdad?s Sadr City slum, Shi?ite militiamen tried to take over police stations and government buildings on Sunday using small arms and grenade launchers, the U.S. military said. ?Coalition forces and Iraqi security forces prevented this and reestablished security in Baghdad at the cost of seven US soldiers killed and more than two dozen wounded,? a military statement said. At least one Iraqi was reported killed.

Spanish-led troops and Iraqi police meanwhile fought a battle with militiamen in Kufa near Najaf that officials said left 20 Iraqis, one American and one Salvadoran soldier dead and 200 Iraqis wounded, after protesting militiamen marched on a Spanish-run military base.

As well as in Baghdad, Shi?ite supporters of radical cleric Moqtada al-Sadr clashed with troops in several other cities to denounce the arrest of an aide to the cleric and the closure by US officials of a militant newspaper. A senior US military official said the Kufa incident began when Iraqi security forces came under fire. Apache helicopters and fighter planes were called in but did not fire, he said.

<B>Suicide bomb</B>

Witnesses said the demonstrators, many of them armed, had thrown stones at a military vehicle arriving at the base and shortly afterwards Spanish-led troops and Iraqi police at the base had opened fire on the crowd from several directions.

Black-clad members of the Mehdi Army, a banned militia loyal to Sadr, returned fire at the garrison for around three hours. A Reuters correspondent said most of the dead wore Mehdi uniforms. Militiamen, some of them teenagers, darted out from an area of workshops and junkyards to fire at the base before running for cover.

Sadr, 30, said he would stage a sit-in at a Kufa mosque until his demands were met. ?Terrorise your enemy, God will reward you well for what pleases him. It is not possible to remain silent in front of their abuse,? his statement said.

Sadr had faded from the tumultuous scene of Shi?ite politics in recent months while the spotlight was on leading moderate cleric Ayatollah al-Sistani. But the Mehdi Army has said for months it is ready for holy war against the Americans if the order comes.In the northern city of Kirkuk, a suicide car bomber wounded two US soldiers and five Iraqis at another pro-Sadr protest. British officals said British troops had injured a number of people during related protests in the southern town of Amara. It was not clear whether anyone was killed.

There were also demonstrations in Basra and Nassiriya by Sadr?s supporters, who have marched in the past week against the closure of al-Hawza newspaper, a mouthpiece for Sadr that US-led authorities accused of inciting anti-American violence. They also protested against the detention of Sadr?s aide Mustapha Yacoubi. A senior US official said he was seized by US-led forces on Saturday in connection with the killing of Shi?ite cleric Abdul Majid al-Khoei last year.

Khoei was hacked to death at a Najaf mosque by a mob which also killed one of his aides. Senior clerics at the time blamed the killings on a group linked to Sadr, who denied involvement.

?Sheikh Moqtada Sadr is our leader. He?s going to lead Iraq. Today we fought the occupation troops and we will keep fighting them until we take over,? said protester Mohammad Hanoun, 23.

<B>Bremer says cleric is an outlaw</B>

But Iraq?s US administrator Paul Bremer said yesterday that radical Shi?ite Muslim cleric Moqtada al-Sadr was an outlaw threatening Iraq?s security.

?We have a difficult security situation. We have a group under Moqtada al-Sadr that has basically placed itself outside the legal authorities, the coalition and Iraqi officials,? said Bremer, head of the US-led Coalition Provisional Authority. ?Effectively he is attempting to establish his authority in the place of the legitimate authority. We will not tolerate this,? he said. ?We will reassert the law and order which the Iraqi people expect,? Bremer told reporters as he met Iraqi government ministers to discuss how to deal with Sadr.

Oppressed under former President Saddam Hussein, Iraq?s Shi?ites have grown increasingly vocal in the year since US-led forces ousted Saddam and want their clear majority of the population to be reflected in a future Iraqi government. US Senate Foreign Relations Committee Chairman Richard Lugar of Indiana and the panel?s ranking Democrat, Senator Joseph Biden of Delaware, said on Sunday more troops might be needed to stabilize Iraq and Washington might have to consider extending its June 30 deadline to hand power to Iraqis.

<B>Andrew Marshall</B>