Twenty-five gunmen and police died in gunbattles before the Iraqi army moved in to retake the city of 750,000 people at the head of Iraq's famous marshlands where the Tigris and Euphrates rivers draw close together. Amarah is 30 miles from the border with Iran, where the Shiite theocracy is said to be funding, arming and training both rival militias.

The Amarah showdown between the two virtual private armies highlighted the potential for an all-out conflict between them and their political sponsors, both with large blocs in parliament and important to the survival of Prime Minister Nouri al-Maliki's shaky 4-month-old government.

It also underlined the deep underlying rift that exists between the firebrand cleric Muqtada al-Sadr's faction, whose forces took Amarah on Friday, and that of the more traditional but powerful Supreme Council for the Islamic Revolution in Iraq, or SCIRI, headed by key power broker Abdul-Aziz al-Hakim, who spent decades in Iranian exile during Saddam Hussein's rule.

The U.S. exit strategy depends on returning military and political control to the Iraqi government, but outbreaks of civil conflict raise doubts about how long that will take and add urgency to a policy review under way among Bush administration political and military officials.

Defense Secretary Donald H. Rumsfeld said Friday that despite the violence in Amarah, it was not a strategic error for the British to turn over control of the city to the Iraqis in August.

"The biggest mistake would be to not pass things over to the Iraqis, create a dependency on their part, instead of developing strength and capacity and competence," Rumsfeld said. "It's their country. They're going to have to govern it. They're going to have to provide security for it. And they're going to have to do it sooner rather than later."

The clashes marred the Muslim day of prayer for the second Friday in a row in cities where American and British forces had only recently ceded military control to Iraqi security forces and the army. More than 100 people were slain in Balad this past week, most of them by Shiite deaths squads drawn largely from al-Sadr's Mahdi Army.

The Mahdi Army held Amarah for several hours in an embarrassingly strong showing against the local police and security forces, controlled by the Badr Brigade militia loyal to SCIRI, the country's dominant political force with deep and historic links to Iran.

Elsewhere in Iraq on Friday, police reported the deaths of 34 people, including 10 killed in mortar attacks overnight in Balad, an hour north of the capital, and a family of nine Shiites shot to death when gunmen burst into their home in Aziziyah, 35 miles southeast of Baghdad. A U.S. soldier was killed when his vehicle was hit by a roadside bomb southwest of the capital.

Until recently, Baghdad had been the focus of sectarian and Sunni insurgent killers, prompting the United States to launch a drive in August to rid the capital of the gunmen and torturers. An additional 12,000 U.S. and Iraqi forces were put on the streets for the task.

But two months into the operation, the U.S. combat death toll in October alone stood at 75 ¡ª likely to be the highest for any month in nearly two years. Attacks on Americans jumped by 22 percent in the first three weeks of the holy month of Ramadan, when compared to the three previous weeks. The U.S. military spokesman in Iraq said the bid to cleanse the capital was failing and needs to be refocused.

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