BASRA, Iraq - Iraq considers a U.S. military raid that killed two people a crime and wants U.S. forces to hand over those responsible to the courts, an Iraqi official said on Sunday.

Hundreds of Iraqis protested in the southern city of Kut against U.S. forces and the provincial governor also condemned the military operation.

The U.S. military had any immediate comment on the Iraqi stance but said the raid was carried out with the full approval of Prime Minister Nuri al-Maliki's government .

It said it had targeted special group fighters, its term for Shi'ite militiamen the United States says are funded and armed by Iran, in the operation early on Sunday in Kut, 150 km (95 miles) southeast of Baghdad.

The general commander is affirming that the killing of two citizens and detaining of others in Kut is considered a violation of the security pact, said an official in the office of Major General Qassim Moussawi, Baghdad's security spokesman.

He asks the commander of the multinational forces to release the detainees and hand over those responsible for this crime to the courts.

'General commander' refers to Maliki.

Under the U.S.-Iraqi security pact that came into force this year, the 137,000 U.S. troops in Iraq can no longer conduct military operations without Iraqi approval.

The pact says U.S. soldiers are immune from prosecution in Iraqi courts unless they are suspected of grave crimes committed while off duty outside their bases.

Two Iraqi military commanders who authorized the raid were detained on the orders of the defense minister, spokesman Major General Mohammed al-Askari said. A committee had been sent to Kut to investigate.

This committee has managed to get the six people detained by the Americans released, he said.

Witness Nidhal Abdul Munem, the sister of the man killed in the raid, choked back tears as she recounted her story.

They invaded our house, shot my brother and my sister-in-law and herded us into one area. All the while, we tried to ask, 'Why are you doing this?' she said.

ANGRY CROWDS

In a statement issued before the Iraqi government's condemnation, the U.S. military said its troops had shot and killed a man suspected of being behind supplying weapons to the Shi'ite fighters. A woman was killed in the crossfire, it said.

As a funeral procession made its way through Kut, carrying the cloth-draped coffins of the two people killed in the raid, protesters shouted angry slogans and demanded the release of the seized men, calling Americans criminal occupiers.

We condemn this horrific incident. Innocent people were killed and the city is now very tense, said Latif al-Tarfa, governor of Wasit province.

U.S. First Lieutenant John Brimley said the women killed was in the area with a suspect and moved into the line of fire. She died of her wounds before she could be evacuated.

But Iraqi police Major Aziz al-Amara, who commands a rapid reaction force in Kut, said all of those targeted in the raid were innocent. One of those arrested was a police captain.

Wasit deputy governing council head Mehdi al-Makosi said the families of the victims were pursuing a legal case against the soldiers who carried out the raid.

The raid was mounted just months before U.S. combat troops are due to withdraw from Iraqi cities. U.S. President Barack Obama has ordered all U.S. combat operations in Iraq to cease in August 2010 before the full withdrawal by the end of 2011.

Kut and surrounding Wasit province were the last area south of Baghdad to be handed over to Iraqi forces last October.

Wasit province was the scene of fighting during an uprising by followers of Shi'ite cleric Moqtada al-Sadr in March and April last year but like other parts of the south has since become largely quiet as Sadr's followers observe a ceasefire.

Iraq Security