A British military official in Iraq says 25 people were killed in clashes between Shi'ite militias and Iraqi security forces in the southern city of Amara.
At least 90 people were injured in street battles between police and armed fighters from Shi'ite cleric Moqtada al-Sadr's Mahdi Army.
Militiamen destroyed three police stations in the city during the fighting that began overnight Thursday.
Iraqi and British officials described the situation as still tense but said a truce had been arranged.
Iraqi Prime Minister Nouri al-Maliki sent an envoy to Amara to try to quell the unrest.
In other violence on Friday, Iraqi authorities say mortar fire in the town of Balad killed at least nine people.
U.S. officials say President Bush will review the situation in Iraq in consultations with top U.S. generals Saturday.
US Defense Secretary Donald Rumsfeld told reporters at the Pentagon today that the United States expected violence in Iraq to rise during the Muslim holy month of Ramadan, and he said it did increase. He said the top US commander in Iraq, General George Casey, is addressing the matter.
Thursday, a US military spokesman in Iraq (Major-General William Caldwell called the increase of violence in Baghdad "disheartening."