Three British soldiers killed in Basra shootout

"The casualty has been taken to the hospital for treatment."

The BBC News Online said the soldiers had been attacked as they were entering a former secret police building now being used by British troops.

Following the attack, British soldiers had sealed off the area around the University of Basra and were searching vehicles. Journalists were not being allowed to enter the area.

The deaths bring to 11 the number of British soldiers killed in Iraq since U.S. President George W Bush declared major combat operations over on 1 May.

Witnesses and a British major earlier said that three British soldiers and as many as four Iraqi civilians had been wounded when British troops came under fire.

The soldiers, driving a sport-utility vehicle, were ambushed by gunmen in a white four-door Toyota near the old British cemetery, Sabir Naama, a street vendor, told AFP.

"The driver was hit and lost control of the vehicle, hitting an Iraqi woman and two children. He then slammed into a building," said Naama.

Another man caught in the crossfire between the soldiers and the gunmen was hit and taken to hospital, he added.

In recent weeks, violence has intensified in British-controlled southern Iraq, which had been much quieter than U.S.-run areas around the capital.

Six British soldiers were killed and eight others injured on June 24 in the first major attack on British soldiers since the fall of the Iraqi capital on April 9.