BAGHDAD (Reuters) - A British journalist held for two months by kidnappers in the southern Iraqi city of Basra was rescued on Monday by Iraqi forces sweeping through the city in a crackdown on militants, the Iraqi military said.

Richard Butler, a photographer working for the U.S. network CBS, appeared in good health and high spirits after his release. Unknown militants had seized him and his interpreter from their hotel in Basra, freeing the interpreter a few days later.

“The Iraqi army stormed the house and overcame my guards and then burst through the door,” said Butler, smiling broadly and surrounded by Iraqi officials on Iraqiya state television.

“I had my hood on, which I had to have on all the time. And they shouted something at me and I pulled my hood off.”

In northern Iraq, a suicide attack and two car bombs killed 18 people. Among the dead were 12 members of Iraq’s Kurdish Peshmerga security force who were in a truck near the Syrian border when a car bomb exploded as they passed by, police said.

An explosion in central Baghdad’s Tayaran Square killed five people and wounded nine, police said, while a roadside bomb attack on a U.S. patrol set a market ablaze.

CBS welcomed Butler’s release. “We are incredibly grateful that our colleague, Richard Butler, has been released and is safe,” the network said in a statement.

Lieutenant-General Mohan al-Furaiji, commander of Iraqi armed forces in Basra, said a special team had been set up to search for a policeman suspected of being behind the kidnapping.

Furaiji, who was shown smiling widely on television with his arm on the freed photographer’s shoulder, told reporters Iraqi forces searching for weapons had stumbled upon Butler when they entered a house in Basra’s central Jbela district.

“We were suspicious about a house with a guard standing outside. We arrested the guard, entered the house and found the British journalist handcuffed and hooded,” Furaiji said.

Elements of Iraq’s police force are often accused of cooperating with militants.

But the rescue was a triumph for Iraqi security forces, embarrassed last month by a hasty crackdown on gunmen in Basra that sparked fighting across the south and Baghdad while failing to dislodge masked Mehdi Army militiamen from the streets.

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HOUSE AROUSED SUSPICION

The kidnapping of Butler, one of the few Westerners who dared venture out in Basra without a military convoy, was a symbol of the rampant lawlessness in a city that controls Iraq’s only port and 80 percent of its oil revenue.

The Committee to Protect Journalists says 51 journalists have been kidnapped in Iraq since 2004, with 12 of those killed.

It has called the war “the deadliest conflict for journalists in recent history,” with a total of 127 journalists and 50 media support workers killed since 2003.

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The news of Butler’s release came after a night of renewed clashes in Baghdad’s Sadr City slum, the scene of intense street battles over the past three weeks between security forces and the Mehdi Army of Shi’ite cleric Moqtada al-Sadr.

The fighting has been more intense than at any time since the first half of 2007, thrusting the Iraq conflict back onto centre stage of the U.S. presidential contest.

In Baghdad, U.S. forces said they had killed six gunmen in an overnight battle in Sadr City, firing from M1 tanks and helicopters at fighters using rocket-propelled grenades.

“We heard the sound of bombing and clashes after midnight. It lasted for around an hour and then stopped. American planes were hovering in the sky until morning,” said grocer Ali Sittar.

A senior U.S. military official who requested anonymity said Apache helicopters and drone aircraft were “loitering” around the clock above Sadr City, hunting militants who have fired rockets at the Green Zone government and diplomatic compound.

In the slum, angry mourners carried a coffin containing the body of a man killed in clashes through the streets.

U.S. commanders have criticised the planning of the March crackdown in Basra, led personally by Shi’ite Prime Minister Nuri al-Maliki. The Iraqi government has sacked 1,300 soldiers and police involved in the operation for failing to fight.

In a statement, Sadr urged the government to reverse the decision, saying those who refused to fight had only been following orders from Shi’ite religious leaders.