Baquba: At least three people were killed on Friday when Iraqi forces clashed with an Iranian opposition group, a security official said, but the rebels claimed 25 of its members died in a full military assault.
US Defence Secretary Robert Gates, visiting American troops in northern Iraq, expressed concern at reports of casualties, and urged Iraqi authorities to show restraint.
Major Hassan al-Tamimi of the Iraqi Army in Baquba, capital of central Diyala province, said the armed forces clashed with stone-throwing crowds at the Camp Ashraf base of the People`s Mujahedeen of Iran, or PMOI.
"The clashes started at around 4:40 am (0140 GMT) as the Army was taking positions inside a cemetery in Ashraf," Tamimi said. "The latest toll is three people killed and 27 wounded, among them 13 members of the security forces."
The People`s Mujahedeen of Iran said at least 25 of its members were killed and 325 wounded in a full-fledged military assault on its base about 80 kilometres (50 miles) north of Baghdad.
"I am very concerned with the report of deaths and injuries. I urge the Iraqi government to show restraint," Gates told reporters when asked about the reports during a visit to the Camp Marez US military base in northern Iraq.
Video footage the rebel group showed soldiers in riot gear rushing on foot and in vehicles into the camp, and some apparently wounded Mujahedeen members being carried away.
The authenticity of the video could not be verified.
A source at Baquba`s main hospital confirmed the facility had received three dead bodies.
The PMOI has about 3,500 members housed at Camp Ashraf.
A left-wing and Islamic movement, it was founded in 1965 in opposition to the shah of Iran and has subsequently fought to oust the clerical regime that took power in Tehran after Iran`s 1979 Islamic revolution.
The group set up Camp Ashraf in the 1980s -- when late Iraqi dictator Saddam Hussein`s regime was at war with the Islamic republic -- as a base to operate against Tehran.
It was disarmed following the US-led invasion of Iraq in 2003.