(Corrects spelling of hospital name in paragraph 4)

BAGHDAD, Sept 29 (Reuters) - The U.S. military confirmed on Saturday it carried out an air strike in the Doura district of southern Baghdad on Friday, saying it had targeted men firing mortars into a neighbouring area.

"Coalition forces surveillance elements observed a group of men setting up and firing mortars in the Doura neighbourhood of southern Baghdad. After they fired the mortars, the men hid the mortar tube nearby," a U.S. military statement said.

"Responding to this hostile action, coalition forces called for air support and engaged the men."

Reuters television footage from Yarmouk Hospital in Baghdad showed three men and two boys who had been wounded in the attack. Doctors had amputated the left leg of one of the boys.

A senior health official in central Baghdad told Reuters on Friday that seven men were killed in the attack and six injured.

The U.S. military said it estimated two or three people were killed or wounded but could not give a precise figure as the bodies were removed before troops arrived at the scene.

"We regret when civilians are hurt or killed while coalition forces search to rid Iraq of terrorism. Terrorists continue to deliberately place innocent Iraqi women and children in danger by their actions and presence," the U.S. statement said.

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