Angry Iraqis have clashed with British troops in the southern city of Basra, setting two armoured vehicles on fire.
The troops fired warning shots in what a British spokesman said was a confused situation.
The violent protests erupted after Iraqi authorities detained two British nationals they said had fired on police.
Basra, Iraq’s gateway to the Gulf, is under British military control.
An Iraqi official said he had been informed by the British military that the two men were undercover soldiers in civilian clothes.
He said an Iraqi judge was questioning the men.
They were said to have been driving a civilian car when a shooting incident took place between them and Iraqi patrols.
After the violent protests, British tanks took up position near where the two men were being held.
British military authorities were unable to confirm the incident.
Basra has been relatively stable compared to central Iraq, where Sunni insurgents have killed thousands of Iraqi and American forces, officials and civilians with suicide attacks, roadside bombs and shootings.