Baghdad: An Iraqi raid on an Iranian opposition group`s camp north of Baghdad killed seven people, according to a police officer and members of the exile group.
A standoff at the camp continued for a second day on Wednesday.
However, some Iraqi government officials denied any deaths in the operation at Camp Ashraf and the casualty reports could not immediately be independently verified.
The camp housing members of the People`s Mujahedeen Organisation of Iran is located in a dangerous area and Iraqi authorities prevented reporters from gaining access on Wednesday.
About 3,500 ex-Iranian fighters and relatives live in the camp, first set up in 1986 when they helped Saddam Hussein in the Iraq-Iran war. After the US invasion of Iraq in 2003, American troops disarmed the fighters and confined them to the camp.
The Americans handed over responsibility for the camp to the Iraqis to comply with a security agreement that took effect on January 1 but said they would maintain a force nearby to ensure humane treatment of the Iranians.
Tensions rose as the Iraqi government stepped up efforts to get the group to leave the country in a friendly gesture to close ally Iran, which considers the exiles part of a terrorist group.
Iran thanked the Iraqi government for the raid.
"Yesterday, we heard of the Iraqi government raid on Camp Ashraf," said Parliament Speaker Ali Larijani. "This is appreciated, that the Iraqi government decided to clean Iraq from the dirty presence of terrorists," he said.
Raid a `crime against humanity`
Meanwhile, the main Iranian resistance movement in exile has condemned a raid by Iraqi forces on their supporters` last main base camp, calling it a "crime against
"Attacking besieged people with no means of defence is a crime against humanity," Maryam Rajavi, president of the National Council of Resistance of Iran, told a news conference in Rome after riot police clashed with Iranian exiles in the Iraqi town of Ashraf.
The group accuses Baghdad of taking orders from Tehran.
About 100 Iranian exiles demonstrated outside the Parliament building in Rome where Rajavi was speaking.