BAGHDAD - AT LEAST 12 people died when gunmen swooped on a row of goldsmiths' shops in a brazen robbery in the Iraqi capital on Sunday and ended up in a gunfight with security forces, police and military sources said.

The gunmen used hand grenades and small arms to kill three gold shop owners in a market in the Mansour district of western Baghdad, an Interior Ministry source said.

When the attackers emerged from the shops they were met by soldiers and police. Two gunmen, two police officers, a soldier and four civilians died in the shootout, two security sources said.

Security officials say some of the insurgent groups that took up arms after the 2003 US-led invasion that toppled Saddam Hussein have turned to crime to finance their operations, attacking banks, gold markets and jewellery shops.

Authorities said they did not yet know whether the Mansour suspects were insurgents or a criminal gang.

Iraq has seen a big drop in violence since Washington sent thousands of extra troops and built alliances with tribal leaders to battle a stubborn insurgency but attacks are still common in Baghdad and ethnically and religiously mixed areas north of the capital.

2 killed in gold shop robbery