Police said gunmen manning a makeshift checkpoint near Udhaim stopped vehicles approaching the small town 120 kilometers north of Baghdad and killed passengers.

"[They] dragged them one by one from their cars and executed them," a police official said.

The victims included students on their way to write end of term exams, children and elderly men, said another senior police official in Diyala province, scene of frequent attacks by insurgents waging a campaign of bombings and shootings to topple the US-backed, Shiite-led government.

Some tried to flee but were gunned down, another police source said. Photographs showed six men shot in the chest, including one old man and five young men. It was unclear whether the victims were high school or university students.

In Iraq's south, a Sunni religious group accused security forces in the Shiite-run city of Basra of killing 12 unarmed worshippers in a mosque early Sunday, but police said they had returned fire and shot dead nine terrorists.

The incident came just hours after a car bomb killed 28 people in Basra, challenging a state of emergency declared by Prime Minister Nuri al-Maliki to crack down on criminal gangs and Shiite factions whose feuding threatens oil exports.

It was among the worst violence Iraq's second city has seen since US- forced invaded to topple Saddam Hussein in 2003.

Communal violence has mounted throughout Iraq since the February bombing of a Shiite shrine in the city of Samarra, touching off a wave of revenge killings that sparked fears of civil war.

The United States, which has 130,000 troops in Iraq, hopes Maliki's broad coalition of majority Shiites and minority Sunnis and Kurds will be able to defuse the violence.

Key to that will be the naming of non-sectarian interior and defense ministers who can quell communal and insurgent attacks.

Intense wrangling forced Maliki to leave the posts empty when he unveiled his government of national unity on May 20. He has threatened to present his own nominees to parliament if political blocs fail to agree on candidates.

Government sources said leaders were close to a deal to present to parliament former Shiite army officer Farouk al-Araji for interior minister and Sunni General Abdel Qader Jassim, commander of Iraqi ground forces, for defense.

But deputy speaker Khaled al-Attiya said the parliament session had been postponed "until further notice."

Political sources said the powerful Shiite Alliance was deadlocked on a nominee for the Interior Ministry post.

Meanwhile, an Iraqi Interior Ministry official has denied a state television report that four Russian embassy employees kidnapped in Baghdad Saturday had been released.

REUTERS