BAGHDAD (AFP)- US helicopters fired off missiles and insurgents danced around a burning US tank as a frenzied three-hour battle on Baghdad`s meanest street left five people dead.

The fighting erupted after a suspected car bomb exploded at around 4:40 am Sunday (0040 GMT) on Haifa street, considered a bastion of Saddam Hussein loyalists where insurgents and US troops clash regularly, a US military source said.

The sound of heavy machine-gun and Kalashnikov fire reverberated for three hours from the street, home to an urban war terrain of high-rise apartment buildings, perfect for snipers.

The fighting climaxed shortly after 8:00 am, when an angry mob pelted a burning US tank with stones and danced around the armoured vehicle, a witness said.

One of the mob was waving a black flag emblazoned with the name Tawhid wal Jihad (Unity and Holy War), the organisation of suspected Al-Qaeda operative Abu Mussab al-Zarqawi.

The man climbed atop the smoldering tank and waved his flag amid the cries of ululating veiled women.

A pair of US helicopters then swooped down over the neighborhood and fired off missiles and heavy machine-gun fire at the mob. The US strike left at least five corpses scattered on the ground and 45 wounded, according to an AFP correspondent.

The Iraqi health ministry confirmed the death toll and said another 45 people were wounded in the fighting between the Americans and the rebels.

US forces and Iraqi police sealed off the street and occasional explosions rattled the area, but the fighting appeared to die down by 9 am.

Just east of Haifa street, insurgents fired mortar shells early Sunday into the Green Zone, the US and Iraqi government headquarters in Baghdad, a US military source said, but there was no word on casualties.

Insurgents frequently shell the heavily-fortified Green Zone with mortars.

An Iraqi police colonel from the interior ministry also died in a car bombing on his way to work in the western Baghdad neighborhood of Amariya, a ministry spokesman told AFP.

The bloodshed came the day after nine people were killed in attacks around the country including a national guard colonel in Baquba and police captain in the southern town of Samawa.

In the main southern city of Basra, an Iraqi was killed and two wounded when a bomb exploded outside the compound housing US and British consulates.

The Sunday battle came hours after US forces across Iraq commemorated the three-year-anniversary of the September 11 attacks on New York and Washington, which opened the door to a new era of preemptive war.

And a US military intelligence officer was jailed for eight months and discharged for bad conduct after pleading guilty in the second conviction of a US soldier implicated in the Abu Ghraib prison scandal.

Specialist Armin J. Cruz, 24, confessed to conspiring to maltreat Iraqi prisoners and abusing detainees himself.

The abuses at Abu Ghraib prison west of Baghdad that saw Iraqi detainees beaten and sexually humiliated have been linked to new "get-tough" interrogation methods issued by the Pentagon in the aftermath of September 11.

The scandal has tarred the US reputation and proved a major hurdle in the war on terror, providing a propaganda victory for the Al-Qaeda network that carried out the attacks three years ago.

Iraq`s foreign hostage crisis also grinded on as Italy`s foreign minister said he was still hopeful that two Italian women held hostage in Iraq would be released, as a purported ultimatum by the kidnappers was about to expire.

And there was still no word on two French journalists held hostage by extremists since August 20.