BAGHDAD, July 3 (Reuters) - The U.S. military said on Tuesday it was investigating an air strike on insurgent targets in a southern Iraqi city after local officials said 10 civilians were killed in the attack.

The military said in a statement two F-16 fighter planes hit targets in a street in the Shi'ite Muslim city of Diwaniya after militants fired up to 75 mortar bombs and rockets at a military base early on Monday.

"Coalition forces are reviewing the incident to ensure that appropriate and proportionate force was used in responding to the intense attack," the military said.

Hameed al-Juati, a senior health official in Diwaniya, told local radio on Monday 10 civilians had been killed. A hospital source and a police source both also said 10 people had died.

The hospital source said the dead included six children under the age of 12.

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