The governor of the Iraqi province where Abu Musab al-Zarqawi was killed this month called in the army after clashes between Sunni and Shia fighters in north of Baghdad on Friday, police and his office said.
But Defence Ministry spokesman denied receiving a request to dispatch army units to Muqdadiya in Diyala province, an ethnically mixed area where sectarian violence has deepened in recent weeks.
The US military said US-led forces killed three insurgents and captured four in clashes that began on Thursday in the nearby village of Khairnabat, where police and witnesses said Shia militias had attacked Sunnis fleeing the town.
The large, mixed region north-east of Baghdad has seen some of the worst bloodletting since a US-led invasion toppled Saddam Hussein's Sunni-dominated regime in 2003.
Recent bloodshed and tit-for-tat sectarian killings and attacks against mosques in Baquba and elsewhere have raised fears the Diyala violence could spark all-out sectarian war in Iraq despite the formation of a national unity government.
Police told Reuters suspected Shia militias on Friday fired three rocket-propelled grenades at a Sunni mosque in Muqdadiya, 90 km (50 miles) north-east of Baghdad, damaging the mosque's minaret but causing no casualties.
Sunni insurgents fired mortar rounds at a Shia mosque in Muqdadiya to retaliate for the first attack, police said, also leaving no casualties. Both attacks took place when the mosques were crowded during Friday's prayers, police said.
The violence follows fighting in nearby Khairnabat that police said erupted after Shia militias on Thursday attacked Sunni residents in revenge for a motorcycle bomb last week that killed 18 people in Khairnabat's market.
The US military said fighting began when Iraqi police trying to enter the village came under small arms fire and rocket-propelled grenades fired by terrorists.
It said US and Iraqi forces chased the militants to a house where they had barricaded themselves and that air support was called in to end the fighting.
After the fighting died down, US forces searched the village, it said in the statement sent early on Friday. Muqdadiya and Khairnabat lie north of Baquba, a mixed Sunni and Shia city 65 km (40 miles) north of Baghdad.