Fighting in Basra began late Monday night as the Iraqi army — with air cover from the U.S. and British military — moved through the city.
Shiite cleric Muqtada al-Sadr's Mahdi Army fought back as government troops entered neighborhoods controlled by the militia.
Basra resident Ayman Mohammed says people are terrified: "Bullets are hitting the doors and windows of our house. We are hiding in one room because we are so scared. This is the worst fight we have ever seen in Basra."
Iraqi Prime Minister Nouri al-Malaki went to Basra on Monday and announced that there would be a crackdown on the militias there. He is still in the southern port city, overseeing the operation.
Despite the fighting, Mohammed says, she supports the offensive. She says that for years the people there have been living in fear.
"The situation in Basra is very bad," she says. "We have many groups and militias and people are killed in the street. Young men, women, doctors, engineers — everyone is targeted here."
Basra was under the nominal control of British forces until they withdrew in August. Still, for years the militias have held sway there. Assassinations — particularly of women — gang activity and smuggling have made Basra one of the most lawless cities in Iraq.
But the conflict in Basra has wider implications.
The Mahdi Army — one of the most well armed and feared groups in Iraq — has been observing a cease-fire since the U.S. surge began seven months ago.
Joost Hiltermann, with the International Crisis Group, says if the cease-fire collapses, there will be serious consequences.
"You may see a general return of the Sadr movement and its followers in the various localities in the south and possibly even in Baghdad to armed fighting," he said. "That would be a very dangerous development. It would certainly put an end to whatever relative quiet the surge has created so far."
Already the unrest in Basra is spreading.
There is fighting in the southern cities of Hilla and Kut — where Mahdi Army members have taken over five neighborhoods.
More ominously, fighting has spread to Baghdad's vast Shiite slum of Sadr City — a Mahdi Army stronghold. Clashes between the U.S. military and Mahdi militants could still be heard after nightfall. Several other Baghdad neighborhoods have also seen increased Mehdi army activity.
In response to the Basra offensive, Sadr called Tuesday for a nationwide strike and civil disobedience campaign. But many of his commanders may not feel that it is enough. Sadr has not called a formal end to the cease-fire, but he has put his commanders on high alert.