AMERICAN and Iraqi troops fought a pitched battle with one of Baghdad’s most powerful Shia militias yesterday as they sought to seize control of the capital back from sectarian death squads and criminal gangs.

But as 3,700 extra US troops were deployed on the streets of Baghdad its terrified citizens, having lost faith in the Iraqi security forces, are forming their own militias.

The Times learnt yesterday that Tareq al-Hashemi, Iraq’s Sunni Vice-President, is forming a unit of the National Guard that will act as his personal bodyguard and fend off attacks against Addumiyah, a Sunni district surrounded by overwhelmingly Shia districts.

It will be the first official Sunni militia group and a counter to security forces that have been heavily infiltrated by Shia militias.

Yesterday’s battle erupted when Iraqi troops backed by US advisers raided a Shia death squad cell in the huge slum area of northern Baghdad known as Sadr City — the fiefdom of the radical cleric Moqtada al-Sadr and al-Mahdi Army, his illegal militia. There were two hours of heavy fighting — accompanied by US airstrikes — during which two militiamen were killed. Two Iraqi soldiers and an American were also injured.

The US military said that the operation was designed to seize “individuals involved in punishment and torture cell activities”. But al-Sadr’s followers said it was a direct attack on his movement, which forms part of the governing coalition.

As the death toll mounts ordinary Iraqis have increasingly been taking responsibility for their own security.

A young Sunni from west Baghdad, who refused to be identified, said that recruiting had already started for Mr al-Hashemi’s group. The initial aim was to sign up 350 former army personnel who are to be trained as part of the Defence Ministry, which will also outfit and arm them. They were being offered $700 a month.

“We all know the Shia are recruiting in their districts across the city, firstly to kill Sunnis and secondly to divide the country,” said the 26-year-old man, who said that his shop had been closed after Shia militiamen within the police force issued death threats against him and other Sunni shopkeepers in west Baghdad.

“It’ll be called a personal security guard unit for Tareq al-Hashemi to give it official cover and secure funding, but on the ground it’ll be a Sunni militia,” said the source, who is thinking of signing up.

An official from Mr al-Hashemi's Islamic Party told The Times last night: “It’s a very sensitive issue and I can’t comment on it.”

The new Sunni militia represents a fresh setback for the US military, which had withdrawn its troops from the capital and was handing over security to Iraqi forces. But the upsurge in sectarian violence has forced US commanders to reverse their policy and send in more troops from Mosul in the north.

One of the driving forces for the new militia, the Sunni source said, was the recent announcement by Abdelaziz al-Hakim, the head of one of the main Shia parties in government, of the planned formation of “public committees” to supervise neighbourhoods.

Many Sunnis fear that the committees will simply act as informants for Shia death squads.

In other violence yesterday six Iraqi soldiers were killed and fifteen wounded when gunmen attacked their checkpoint near Baquba, northeast of Baghdad, while nine people were killed by a suicide bomber in a police station in nearby Samarra. To the north, four civilians were killed when their bus hit a roadside bomb, while in Fallujah six people were killed in a similar incident.

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