One of the sources said three people were killed and that the vehicle targeted was used by Iraq's Popular Mobilization Forces (PMF), a state security agency composed of dozens of armed groups, many of them close to Iran.

Kataib Hezbollah fighters and commanders are part of the PMF. Three U.S. troops were killed in January in a drone attack near the Jordan-Syria border that the Pentagon said bore the "footprints" of Kataib Hezbollah. The group then announced it was suspending military operations against U.S. troops in the region.

Iraq and Syria have witnessed near-daily tit-for-tat attacks between hardline Iran-backed armed groups and U.S. forces stationed in the region since the Gaza war began in October.

U.S. officials did not immediately respond to a request for comment on Wednesday's strike.

The U.S. struck Iran-backed Iraqi groups in Iraq and Syria last weekend in what it said was just the beginning of its response to the killing of the three U.S. soldiers in a drone attack.

In January, a U.S. drone strike killed a senior militia commander in central Baghdad, an attack Washington said came in response to drone and rocket attacks on its forces.

On Wednesday, Iraqi special forces were on high alert in Baghdad and further units were deployed inside the Green Zone housing international diplomatic missions including the U.S. embassy, a security source said.

(Reporting by Timour Azhari and Ahmed Rasheed in Baghdad; Writing by Timour Azhari and Muhammad Al Gebaly; Editing by Cynthia Osterman)

By Ahmed Rasheed and Timour Azhari