Iraqi officials described the two as undercover soldiers dressed in civilian clothes.

British forces using tanks have broken down the walls of the central jail in the southern city of Basra to free two Britons.

Witnesses said about 150 Iraqi prisoners fled the jail as well.

Iraqi police detained the two British soldiers in the Basra following a shooting incident, a British military spokesman and police sources said.

Britain, however, denied reports late on Monday that its troops had stormed the prison to free two soldiers, saying the pair were released after negotiations.

UK denial

"We've heard nothing to suggest we stormed the prison," the Reuters news-agency quoted a defence ministry spokesman in London as saying. "We understand there were negotiations."

The spokesman said he had no more details of the soldiers' release.

British Defence Secretary John Reid said in a statement that
the two men, who have not been named, were back with British forces.

"I can confirm that the two British service personnel detained earlier today by the IPS (Iraq Police Service), have now been released and are back with British forces," he said.

"The situation in Basra is currently calmer after a day of
disturbances. At this stage it is not possible to be certain why these disturbances began."

Earlier during the day, British forces surrounded a police station in the centre of Basra after Iraqi police refused to release the two men.

The British forces were themselves surrounded by demonstrators who threw stones and British soldiers fired warning shots, he said.

Demonstrators then set fire to two British tanks. British soldiers jumped from the tanks and withdrew without returning fire. It was not immediately known if there were any injuries.

Undercover soldiers

At a recent military briefing in Basra, an AFP correspondent was told British soldiers had been ordered not to stop at Iraqi police checkpoints because of fear that rebels could be posing as Iraqi police.

British forces have rescued two UK servicemen who were arrested by Iraqi police in the southern city of Basra.

Official Iraqi sources say British tanks stormed the city's jail, but the Ministry of Defence says the men's release was negotiated.

Basra governor Mohammed al-Waili said it was a "barbaric act of aggression".

The arrests sparked clashes in which UK tanks came under attack. Two civilians were reportedly killed and three UK soldiers were injured.

MoD officials insist they have been talking to the Iraqi authorities to secure the release of the men - who were reported to be working undercover.

But they do acknowledge a wall was demolished as UK forces tried to "collect" the men Iraqi police accused of firing on them.

However, sources in the Iraqi Interior Ministry say six tanks were used to smash down the wall in a daring rescue operation.

Witnesses told the Associated Press around 150 prisoners escaped during the operation but Iraqi officials later denied any prisoners had escaped.

Earlier, two British tanks, sent to the police station where the soldiers were being held, were set alight in clashes.

Crowds of angry protesters hurled petrol bombs and stones injuring three servicemen and several civilians.

TV pictures showed soldiers in combat gear, clambering from one of the flaming tanks and making their escape.

In a statement, Defence Secretary John Reid said the soldiers who fled from the tanks were being treated for minor injuries.

Mr Reid added that he was not certain what had caused the disturbances.

"We remain committed to helping the Iraqi government for as long as they judge that a coalition presence is necessary to provide security," the statement said.

Law and order

But Colonel Tim Collins, the former commander of British troops in Iraq, described the Basra unrest as like a "busy night in Belfast".

* Iraq's Finance Minister, Ali Allawi, tells the UK's Independent newspaper that large-scale corruption in Iraq's ministries, particularly the defence ministry, has led to the theft of more than $1bn.



U.S. Claims civil war a Success in Iraq Despite Onslaught

A Western military spokesman in Basra confirmed "an ongoing disturbance" in the city on Monday but said Iraqi and British forces were working together to quell it.


Witnesses said the clashes developed amid British attempts to win the release of the two Britons. Fighting in the city continued into Monday evening, and witnesses saw a British armored vehicle in flames after it was allegedly set on fire by Iraqi police. Police convoys circulated in downtown Basra, urging residents to help stop the British from freeing the two soldiers.
See also:
 http://www.washingtonpost.com/wp-dyn/content/article/2005/09/19/AR2005091900572.html
 http://news.bbc.co.uk/2/hi/middle_east/4262336.stm