Off-duty police officers rampaged through the streets of an ethnically divided Iraqi town and executed up to 60 Sunnis in cold blood, in a horrific revenge attack for the slaughtering of 75 mainly Shia Muslims only hours before in a suicide bombing.

In signs that the sectarian conflict in the north-western Iraqi community of Tal Afar has spread to law enforcement agencies themselves, dozens of men were reportedly shot in the back of the head by a combination of the officers and Shia militiamen in an overnight attack at the Sunni district of al-Wahda.

Reports identifying some of the perpetrators as off-duty policemen are hugely significant, as they are the strongest indicator yet that militant organisations have infiltrated the ranks of those who are meant to be ensuring peace in Iraq.

According to a leading local politician, 18 policemen were arrested by the Iraqi Army today after being identified by local Sunnis caught up in the violence, alongside well known local Shia militiamen.

The gang reportedly stormed through the neighbourhood late last night, firing at their victims at close range and leaving bodies piling up in homes and on Tal Afar's streets. All the victims were men aged between 15 and 60 years old.

A doctor at the town's main hospital - still overwhelmed with casualties after the earlier double suicide bombing - this morning confirmed that all those who died had been shot in the head in deliberate execution style.

"I wish you can come and see all the bodies. They are lying in the grounds. We don’t have enough space in the hospital. All of the victims were shot in the head," he told Reuters.

"No less than 45 people were killed. I’ve never seen such a thing in my life."

The attack is thought to be revenge for two suicide bombings yesterday which left 75 Shia dead and scores injured.

In the first of yesterday's bombing attacks, one of the bombers was reported to have lured victims to buy wheat loaded onto his truck before blowing himself up. The second explosion took place in a used car lot. The death toll from the blasts was still rising today, as many of the injured are reported to be in a serious condition.

Ali al-Talafari, a Sunni member of the local Turkomen Front Party in Tal Afar, said the Iraqi army today arrested 18 policemen after they were identified by the Sunni families targeted. Officers have been drafted in to replace them from nearby Mosul, he added.

Mr al-Talafari claimed that more than 60 Sunnis had been killed in the shootings, but a senior hospital official in Tal Afar put the death toll at 45, with four wounded.

The attacks will be a source of huge frustration to the US-led coalition in Iraq, as they follow an upsurge in violence in Iraq in recent days which shows no sign of abating.

US and Iraqi security forces have deployed thousands more soldiers in the Iraqi capital to try to stem a sectarian war threatening to tear the country apart, and the US has increased its own troop deployment in a controversial troop 'surge,' but the moves appear to have had little impact.

The Tal Afar carnage is especially significant because George Bush last year used the town as an example of the progress being made in Iraq after US-led forces freed it from al Qaeda in an offensive in 2005. The President described it as giving him "confidence in our strategy".

However, even though U.S. and Iraqi forces put up sand barriers around the town to limit access to it after the offensive, the city has suffered frequent insurgent attacks, with yesterday's being the deadliest since the war started.

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