US television networks are reporting what they say was a major battle between US and Iraqi forces outside Karbala, about half-way between An-Najaf and Baghdad.
Estimates of Iraqi casualties ranged between 300 and 500.
The reports of a battle have not yet been confirmed.
More UK casualties to 'friendly fire'
Two British soldiers died in a friendly fire incident near Basra last night.
The two were from the Queen's Royal Lancers, part of the First Royal Regiment of Fusiliers Battle Group.
Two others have been killed in battle and a further 16 have died in accidents and friendly fire since the military campaign began.
In the 1991 Gulf war, Britain lost 18 casualties, 9 to 'friendly fire'.
Basra 'uprising' claimed
British military officials in Central Command in Qatar now say there appears to be 'some sort of uprising' in Basra, but they have no details.
Iraq's Information Minister Mohammad Said al-Sahhaf, has denied reports of an uprising in the southern city.
Tonight, there were reports from British sources that mortars which had been used in the city had been attacked and destroyed.
Iraqi forces in Basra were being reported by Sky News TV as firing mortars on fellow Iraqis who were rebelling against them, with British forces firing artillery on the mortar positions.
New bombing reported in Baghdad
Bombs were reported again tonight in Baghdad.
The reports started just after 8.00pm (Irish) and appeared to be targeted on the city centre, rather than the Republican Guard positions to the South.
State TV and a second, so-called 'youth' channel were reported to be off the air brieflyly after that.
Advance towards Baghdad
A column of 4,000 US marines is believed to have breached Iraqi defences to secure passage north of Nasiriyah in order to advance towards the capital, having successfully crossed the River Euphrates.
A convoy of US Marines drove through the city's streets under cover of helicopter rockets and a barrage of artillery, tank and heavy machinegun fire. However, it is reported they met a fresh ambush on the road north.
The marines came under heavy fire from Iraqi fighters as they crossed the Euphrates river.
The US advance from west of Baghdad has been stalled following overnight artillery exchanges with members of Iraq's elite Republican Guards.
A western correspondent has found the bodies of up to 30 Iraqis who may have been killed while on their way to reinforce the southern city of Nasiriyah.
It is reported tonight that US marines have captured the hospital in the city.
There are claims that arms, ammunition and other military supplies were found inside the building.
Umm Qasr reported to be 'safe'
The strategic town of Umm Qasr, Iraqi's only deep port, is now reported to be in the hands of British forces.
A British commander said the town was now 'safe and open' and that the first aid ship was likely to dock there by Thursday.
Confusion surrounds the Allies' plans for Iraq's second city, Basra, with Britain’s Central Command in Qatar now saying that Royal Marines would not enter the city.
This contradicts an earlier statement in which a military spokesman said British troops would probably have to engage irregular Iraqi troops in street fighting.
Another spokesman in Qatar later said Basra was, however, considered only a potential target.
Chemical attack feared
In Washington, there are allegations that Saddam Hussein has authorised the use of chemical weapons.
Secretary of State Colin Powell said today there were intelligence suggestions that orders to that effect had been given.
Three more US helicopters downed
As fierce fighting between coalition and Iraqi forces continues in the south and centre of the country, Iraq's Information Ministry has said that three more US helicopters have been brought down.
Minister Mohammed Said al-Sahaf said eight invasion soldiers had been killed. The US has so far made no comment on the claim.
The Iraqi minister also denied US claims that Iraq had received military equipment from Russia.
Earlier, President Bush complained to the Russian President, Vladimir Putin, that Russian companies had sold banned military hardware to Iraq.
US names captured pilots
The US has named the two pilots captured when their helicopter was forced down south of Baghdad. Both were chief warrant officers based at Fort Hood in Texas.
Iraqi television has shown pictures of the two men.
The US says broadcasting images of the pilots is contrary to the Geneva Convention on the treatment of POWs.
