A car bomb killed two people Sunday outside an apartment building used by the Iranian-backed Badr Brigade (search), a Shiite militia linked to one of the main parties in the Iraqi government, police said.

The early morning blast also injured three people near the three-story building in central Basra (search). Those who escaped injury included former Basra Gov. Hassan al-Rashid, a senior local leader of the brigade who was in the building at the time of the attack, said police Capt. Mushtak Kadim.

The Badr Brigade is the military wing of the Supreme Council of Islamic Revolution in Iraq (search), or SCIRI, the largest Shiite party in the Iraqi government.

It was not immediately clear who was behind the attack in Basra, a mostly Shiite city in southern Iraq where the majority of Britain's 8,500 forces in the U.S.-led coalition are based.

Despite earlier claims that British soldiers had created much better security in southern Iraq than other areas of the country beset by Sunni-led insurgent groups, Shiite militias appear to have been growing in power in the mostly Shiite region. They are infiltrating police forces and local political organizations, and allegedly attacking British and U.S. forces.

The Guardian, a British newspaper, quoted Basra's police chief, Hassan al-Sade, in May as saying that the militias had become the "real power" in Basra and that he trusted only 25 percent of his own police force.

This summer, al-Qaida in Iraq, the militant group led by Jordanian-born Abu Musab al-Zarqawi, threatened in an audiotape to unveil a new unit to eradicate the Badr Brigade.

But there has also been fighting in this region between the Badr Brigade and other Shiite militias, including the al-Mahdhi militia, which is associated with the firebrand cleric Muqtada al-Sadr. Another Shiite power is the Fadila Party, which won tenuous control of the provincial government this year from SCIRI after allying with smaller parties.

Recently, Basra province Gov. Gov. Mohammed al-Waili, a Fadila member, has sharply criticized British forces.

On Saturday, al-Waili said British forces are compromising security in the region by conducting raids and arrests without coordinating them with Iraqi security forces.

On Thursday, British forces detained 12 Iraqis in a raid on a home in Basra, accusing them of being members or supporters of the al-Mahdi militia, which is suspected of carrying out recent attacks on British and U.S. troops in the region with help from neighboring Iran.

Last week, British Prime Minister Tony Blair said his government suspected that Iran and Lebanon's Hezbollah might be supplying technology and explosives to Shiite Muslim militant groups operating in Iraq, but he provided no proof.

British and U.S. forces have been attacked in recent months by roadside bombs packed with "shaped charges," which are much more deadly than conventional roadside bombs. Such attacks have killed six British troops since July, and late last month two U.S. soldiers were killed when a bomb exploded near their vehicle in Shaibah, a town near Basra.

Last month, British forces used armored vehicles to storm a Basra jail and free two of their soldiers who had been arrested by Basra police. During the raid, British forces learned that Shiite Muslim militiamen and police had moved the men to a nearby house. The British then stormed that house and rescued them.

At least five Iraqi civilians were reportedly killed in the fighting, and Gov. al-Waili responded by suspending all cooperation with British forces. He also demanded the return of the two freed British soldiers, something Britain's government has refused to do.