(Adds troop withdrawals)

By Paul Tait and Missy Ryan

BAGHDAD, Nov 13 (Reuters) - U.S. and Iraqi forces killed an estimated 15 al Qaeda gunmen during a fierce battle south of Baghdad after the militants launched a major attack on recently formed neighbourhood patrols, the U.S. military said on Tuesday.

The military said up to 45 al Qaeda fighters launched a mortar attack and then assaulted two checkpoints manned by local security guards on Monday using a mix of small arms and heavy- calibre machineguns mounted on trucks in a day-long fight.

U.S F-16 warplanes dropped two 500 lb bombs during the battle in the town of Adwaniya, 20 km (12 miles) southeast of Baghdad. The area has long been a haven for al Qaeda in Iraq, which is blamed for most suicide bomb attacks in Iraq.

The al Qaeda raid marked one of the biggest attacks on neighbourhood patrols, many of which are paid by the U.S. military, since their numbers began increasing in and around Baghdad a few months ago.

Officials in the Shi'ite-led government view the formation of such armed groups, predominantly made up of Sunni Arabs, with suspicion and as a potential threat to the administration. A number of local guards are former insurgents who have since turned against al Qaeda.

Colonel Terry Ferrell, commander of U.S. troops in the Adwaniya area, said U.S. and Iraqi ground forces and U.S. helicopters and warplanes were used to repel the attack.

Two members of the 100-strong Adwaniya "concerned citizens" unit, set up only a week ago, were killed.

"The attack was focused specifically on the concerned citizens and on their checkpoints," Ferrell told Reuters, using the U.S. military name for the neighbourhood patrols.

"The concerned citizens fought back valiantly as long as they had ammunition. It was very impressive."

Such groups first emerged last year when Sunni Arab tribal leaders, tired of al Qaeda's indiscriminate killings and strict interpretation of Islam, set up neighbourhood police units in Anbar province in western Iraq.

Anbar, once the heart of the Sunni Muslim insurgency, is now relatively peaceful, and the U.S. military has been spreading Anbar's model into other Sunni Arab and Shi'ite areas.

About 70,000 Iraqis have so far been registered across Iraq under the neighbourhood security plan.

REBUILDING CHECKPOINTS

Ferrell said Iraqi army troops quickly responded when checkpoints north and south of Adwaniya were attacked after the initial mortar bombing.

"They went back in late evening yesterday and reoccupied the checkpoints as the attack waned. They are rebuilding the checkpoints," Ferrell said.

Most of the al Qaeda casualties were caused by small arms and artillery fire rather than by the two 500-pound bombs, which were dropped to block escape routes, Ferrell said.

Some U.S. military commanders have cited the neighbourhood patrols as a factor helping to sharply reduce violence in Iraq in the past few months, especially around Baghdad and in areas where al Qaeda once had a strong presence.

While political progress towards national reconciliation remains slow, improving security has allowed the U.S. military to begin drawing down some of its troops.

The U.S. military is starting to send 3,000 soldiers from a U.S. combat brigade home from volatile Diyala province northeast of Baghdad, U.S. military officials said on Tuesday.

About 2,200 Marines left western Anbar province in September under U.S. President George W. Bush's plan to cut troop levels.

Bush this year ordered an extra 30,000 U.S. troops into Iraq in a last-ditch bid to avert all-out sectarian civil war. There are now 162,000 U.S. troops in Iraq. (Additional reporting by Dean Yates, Aws Qusay and Aseel Kami; Editing by Peter Millership)

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