DIWANIYA, Iraq (Reuters):

At least 20 Iraqi soldiers were killed in street fighting with Shi'ite militiamen in the town of Diwaniya yesterday, some of the bloodiest clashes yet among rival powers in Shi'ite southern Iraq.

A Polish helicopter was hit by gunfire as it provided air support to Iraqi troops but landed safely. U.S. aircraft also took part and U.S.-led foreign troops sealed off the city before calm returned by nightfall after talks among Shi'ite leaders.

Underlining the variety of deadly challenges facing the 100-day-old national unity government of Prime Minister Nuri al- Maliki, a suicide car bomber in Baghdad killed 13 policemen and wounded 62 other people outside the Interior Ministry.

Maliki has vowed to disarm all militias, including those of fellow Shi'ite Islamists with seats in the coalition cabinet. But U.S.-trained government forces face an uphill task.

The Defence Ministry, local officials and the Mehdi Army of populist young cleric Moqtada al-Sadr gave conflicting accounts of battles overnight and into the day in Diwaniya, a normally placid provincial capital, 180 km (110 miles) south of Baghdad.

A Defence Ministry spokesman in the capital said 20 of its soldiers were killed along with 50 unidentified 'gunmen' who had stormed police stations after dark on Sunday. A local leader of the Mehdi Army insisted only two of his men had been killed.

Troops wounded

A U.S. military official said 30 Iraqi troops were wounded.

An agreement brokered in the nearby clerical city of Najaf between Sadr and the Diwaniya governor, from a party that rivals Sadr within Maliki's dominant Shi'ite bloc, brought an edgy calm after many hours of mortar, rocket and machine gun fire.