KUT, Iraq, March 20 (Reuters) - Two Iraqi police officers were shot dead in clashes with members of Shi'ite cleric Moqtada al-Sadr's Mehdi Army militia in the southern city of Kut on Thursday, a hospital source said.

Gunbattles broke out last week between Iraqi security forces and the militia in Kut, fuelling fears that a ceasefire by Sadr may unravel. The violence has so far been confined to the city 170 (100 miles) southeast of Baghdad.

Sadrist leaders have distanced themselves from the fighting, denying their members were involved.

Sadr, whose militia fought two battles against U.S. forces in southern Iraq in 2004, extended a seven-month-old ceasefire last month, but said two weeks ago his followers would defend themselves if attacked.

A hospital source said five people, including three police officers, were injured in Thursday's violence.

A police captain in Kut said Thursday's clashes began as officers searched for militants and other suspects in al-Jihad neighbourhood.

The police have arrest warrants for some 200 people in Kut and have only found 41 so far, ministry spokesman Major General Abdul-Karim Khalaf told reporters on Wednesday.

He said police had been able to regain control of five of nine districts where the Mehdi Army had a strong presence. (Reporting by Jaafar al-Taie; writing by Randy Fabi; editing by Andrew Roche)

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