The tragedy took place in Al-Rashayed village in the central province of Babylon, just south of Baghdad, when special forces and intelligence officers prepared to raid the home of the suspect "accused of terrorism", one security source told AFP.

"The suspect killed everyone in his house," the source said.

Three sources confirmed details of the incident, but had different counts of the victims.

The first local security source said there were 19 dead including the suspect, as well as 12 children aged from two to 12 years who included the offspring of his two brothers.

An interior ministry official said there were 12 dead including seven children and two women.

The suspect, armed with an assault rifle, clashed for two hours with officers, those two sources said.

Three members of the security forces were wounded, they added.

"An intelligence unit went to the home first to arrest him when they were surprised by gunfire," the interior ministry source said.

"After an initial exchange of fire, they called for backup from special forces. A second exchange of fire followed."

A third source said that the suspect belonged to the Islamic State group of jihadists.

The exact motive for the killings, however, remained unclear.

Iraq proclaimed victory against IS in 2017 after the group over-ran large swathes of the country's northern and western regions in 2014.

A low-level IS insurgency, particularly in the north, continues to disrupt efforts to restore stability to Iraq, which is scarred by years of warfare and unrest.

The south and centre of Iraq are also important drug trafficking routes, which security forces have intensified their efforts against.

Drugs have also been sold and used widely in Iraq for many years.