(Updates U.S. military death toll)

By Paul Tait

BAGHDAD, June 3 (Reuters) - Sixteen American troops died in Iraq in the first three days of June, marking a bloody start to the month as the U.S. military presses on with its crackdown on sectarian violence in Baghdad.

A total of 127 American troops died in May, the third worst total for U.S. forces since the invasion of Iraq in March 2003. Fourteen of the latest deaths were reported on Sunday alone by the U.S. military.

North of the capital, a suicide car bomber attacked a police convoy in volatile Diyala province, killing 10 people in a busy market area and wounding 30 others, the local police chief said.

Gunmen at a fake checkpoint near Diyala's provincial capital of Baquba sprayed two minibuses with bullets, killing five people, police said.

Heavy machine gun fire and explosions boomed across central Baghdad late on Saturday from the direction of Sadr City, a sprawling Shi'ite slum and stronghold of radical anti-American cleric Moqtada al-Sadr's feared Mehdi Army militia.

The U.S. military said on Sunday helicopters had strafed militants preparing to fire rockets into the Green Zone, Baghdad's most secure area which houses the Iraqi parliament, many government ministries and the U.S. embassy.

A Reuters journalist saw an air-to-ground missile fired during Saturday's operation.

A U.S. military spokesman in Baghdad, Lieutenant-Colonel Scott Bleichwehl, said helicopters opened fire after gunmen were spotted trying to launch 12 rockets at the Green Zone.

"Reports indicate four terrorists were killed and one wounded," he said.

DEADLY TOLL

U.S. and Iraqi troops have launched a security crackdown in Baghdad to try to quell sectarian violence that threatens all-out civil war. The U.S. military has said it expects higher casualties as more U.S. troops take to the streets.

The crackdown is an attempt to buy time for Prime Minister Nuri al-Maliki's government to meet a series of political benchmarks set by Washington aimed at promoting national reconciliation.

But as U.S. casualties grow, U.S. President George W. Bush is coming under increasing pressure, including from within his own Republican Party, to demonstrate progress in the unpopular war or set a timetable for the return of U.S. troops.

The U.S. military announced on Sunday that 14 more U.S. soldiers had been killed in Iraq, bringing the total to 16 in the last three days.

The worst months for U.S. soldiers were November 2004, when 137 were killed, and April the same year when another 135 died. A total of 3,487 soldiers have died since the invasion began.

Tens of thousands of Iraqis have been killed in the same period. Police said the bodies of 26 people were found in Baghdad on Saturday, apparently the victims of sectarian death squads. Sectarian murders have been on the rise again in Baghdad despite the nearly four-month-old crackdown in the capital.

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