Updated

Shiite militants and U.S. forces battled throughout the Baghdad (search) slum of Sadr City (search), and a mortar barrage slammed into a busy neighborhood in the capital in a new wave of violence Saturday that killed at least 12 people and wounded more than 100 others.

U.S. warplanes and tanks later bombarded targets in Sunni stronghold of Fallujah (search), and U.S. forces exchanged gunfire with insurgents along the city's eastern outskirts and the main highway running to neighboring Jordan, witnesses said. The fighting left at least 14 people injured, hospital officials said.

The new violence came as residents of Najaf began digging out of the rubble and debris left by three weeks of fierce fighting between militants and U.S. forces in the holy city. The crisis ended Friday when the militants withdrew under a peace deal brokered by Iraq's most senior Shiite cleric, Grand Ayatollah Ali al-Sistani.

Iraqi police spread out across Najaf's devastated Old City on Saturday, patrolling in vehicles and on foot and taking over checkpoints that until recently were manned by followers of rebel Shiite cleric Muqtada al-Sadr. U.S. forces pulled back from the neighborhood, the site of much of the fighting.

"It's a joyful thing, the armed men have left Najaf and (neighboring) Kufa," interim Prime Minister Ayad Allawi told al-Iraqiyah television Saturday.

Around the Imam Ali Shrine -- which al-Sadr fighters surrendered Friday after weeks of using it as a stronghold -- street cleaners in orange uniforms swept up debris, trash and rubble, loading it onto trucks. Shards of glass littered the streets, and burnt cars could be seen on the roads, cratered by bomb blasts. Some buildings were blackened by blasts. Others had big holes in them.

A delegation of five government ministers visited al-Sistani to thank him for his peace efforts. They also visited the shrine.

"The shrine inside is cleaned up," Minister of State Qassim Dawoud said. "We hope to open the mosque to the public within 10 days."

Though Najaf remained calm, fighting flared in Sadr City, an al-Sadr stronghold in Baghdad named for the cleric's slain father, as militants armed with rifles and mortars fought with U.S. forces.

Sadr City has been the scene of repeated clashes in the 16 months since the fall of Saddam Hussein, but the violence intensified in recent weeks as the Najaf fighting spread to Shiite communities across the country.

Allawi blamed the continuing violence on renegade al-Sadr followers who do not want to honor the peace deal.

"I believe there are some people who are disobeying Muqtada al-Sadr's orders" to stop fighting, he told Al-Iraqiyah television.

U.S. soldiers in Humvees drove through the neighborhood with loudspeakers, telling people to stay inside because coalition forces were "cleaning the area of armed men," according to an Associated Press reporter at the scene.

Gunfire crackled in the streets as U.S. tanks rolled by and helicopters patrolled the sky. Militants stood in the streets calmly launching round after round of mortars at U.S. forces. Black smoke rose over the neighborhood. A blue sedan was peppered with dozens of bullet holes.

Saad al-Amili, a Health Ministry official, said 10 people were killed and 126 wounded in the skirmishes over the last 24 hours. A young boy was receiving an intravenous drip at the hospital, while a little girl in a pink dress grimaced at the large, bleeding wound in her leg.

Militants fired eight mortars at U.S. troops, but all of them missed and instead hit an electricity substation, cutting power to five or six blocks of Sadr City, U.S. Capt. Brian O'Malley of the 1st Brigade Combat Team, said. U.S. forces suffered no casualties.

Insurgents also fired a round of mortars into a crowded eastern Baghdad neighborhood, killing two boys washing cars in a street, said Interior Ministry spokesman Col. Adnan Abdul-Rahman. At least four mortar rounds landed within an hour in the same area, sending panicked pedestrians scrambling for safety, witnesses said.

The dead teenagers were taken to a nearby morgue, where tearful relatives pounded their chests in grief and others hugged and kissed the boy's bodies. At least six other people were injured, said Bashir Mohammed of Baghdad's al-Kindi hospital.

Another mortar round hit a fuel tank at the Golden Beach hotel, starting a fire that enveloped much of the building in flames. Yet another round fell near the Palestine Hotel, where foreign journalists and contractors stay, but did not explode.

Meanwhile, Iraqi militants kidnapped two Frenchmen to protest France's ban on students wearing Islamic head coverings in public schools, which goes into effect on Wednesday.

Al-Jazeera television said it had received a tape from a group calling itself the Islamic Army in Iraq showing several seconds of videotape with the two hostages. One of them said in poor Arabic, "We are being held by the Islamic Army in Iraq." The second hostage spoke French.

The kidnapping could not be independently confirmed. The French Foreign Ministry said it had no information.

The station's newsreader said the group described the French law banning religious apparel in public schools as "an aggression on the Islamic religion and personal freedoms" and gave the French government 48 hours to overturn the law, without mentioning any ultimatum.

The latest U.S. strikes in Fallujah, a hotbed of Sunni Muslim insurgents, struck the Askari neighborhood and an industrial area in the eastern section of the city. At least 14 people were injured, including eight children, said Dr. Ali Khamis of Fallujah General Hospital.

Witnesses said the air raids began at 7 p.m. and clashes continued for several hours. Smoke billowed into the air, and fire blazed in the night sky after the strikes.

Lt. Col. Thomas V. Johnson, a Marine spokesman, said U.S. troops were responding with tank and artillery after coming under fire. A blaze in the city was sparked by a strike that apparently hit a "significant weapons cache," he said.

On Friday, U.S. airstrikes targeted the same neighborhoods, killing three people, medical officials said. U.S. forces have repeatedly carried out airstrikes in Fallujah, 40 miles west of Baghdad, since Marines pulled back following a three-week siege in April aimed at rooting out Sunni Muslim insurgents.

In other violence:

-- Gunmen killed five policemen and injured two others in the center of the city of Baqouba, a hotbed of violence 35 miles northeast of Baghdad, said police Lt. Col. Salman Saadoon.

-- Police found the bodies of a slain Turkish truck driver and an Iraqi man on a highway near Beiji, 155 miles north of Baghdad, a Turkish diplomat said Saturday on condition of anonymity. It was not known who killed the men.

-- A civilian was killed and two other people were wounded, including an Iraqi police officer, when rebels fired a mortar round in Beiji on Friday, the U.S. military said.