BAGHDAD  - American troops fought street battles with Shia militia in Baghdad's Sadr City, killing three people on the first full day of a deal to end fighting in the area, a military official said on Monday. US military spokesman Lieutenant Colonel Steven Stover said troops came under attack in three incidents on Sunday evening and Monday morning in Sadr City, stronghold of the Mahdi Army militia of anti-US cleric Moqtada al-Sadr. Stover said two "criminals" were shot dead by US troops in two confrontations while the third was killed by a tank shell. Medical and police sources in Sadr City, a teeming slum area where two million Iraqis live, said two bodies had been brought to the main hospital together with 25 wounded people. The latest skirmishes came despite a deal announced on Saturday by the government of Prime Minister Nuri al-Maliki and Sadr's movement to end the violence in Sadr City. Stover said that there were no rocket attacks from the area during the past 24 hours but that seven mortar rounds had been fired in west Baghdad. There were no casualties, he added. One US soldier was killed in a roadside bombing in northwest Baghdad on Sunday night, but not in the Sadr City area, the military said in a separate statement. One of the main issues fuelling the fighting in Sadr City has been the US military's construction of a huge barrier in the southern section of the district to control access by residents. Stover said construction would continue despite the deal, after the US military said on Sunday it was 80 percent complete. There was no immediate comment from the Sadr movement. "We have no intention of stopping our construction of the walls which have been so effective in enhancing security and stability," Stover told AFP. "It restricts the movement of the enemy and the re-introduction of weapons and munitions to the criminal elements." Iraqi army spokesman Brigadier General Qasim Atta said the security forces planned to construct more such walls in the district. "We will build walls in Sadr city for security reasons, and to stop the movement of armed men," he told AFP. "Similar walls built elsewhere have proved successful in achieving security." Since late March, the district has been rocked by gunfire, shelling and air strikes as militiamen clashed with US and Iraqi government troops. The US has a permanent aerial reconnaissance unit in the area. Hundreds of people have been killed and scores wounded in the fighting. The US military said they had killed at least 150 militiamen in the past two months. The military blames the militia for killing or wounding 269 civilians. "We were not the aggressors in these attacks," Stover said adding that the US military and Iraqi security forces would continue to defend themselves and the civilian population with lethal force. Fighting swiftly spread to Sadr City after Maliki ordered a crackdown on Shia fighters in the main southern port city of Basra in March. Clashes intensified after US forces began constructing the concrete barricade which the military says aims to stop infiltration by militiamen and rocket and mortar fire against the Green Zone compound which houses the Iraqi government and the US embassy.