From what I can gather, there was a meeting in a provincial governor's office involving local authorities, US and Iraqi forces to coordinate security for an upcoming Shia pilgrimmage. This gathering was attacked from several sides by 20-30 heavily armed militiamen supported by indirect fire.
(NYTimes) "Iraqi state television reported that at least two dozen gunmen assaulted the building, getting inside, and drawing a response from American troops who were dropped by helicopter onto the roof."
(Just to complicate it all, (AP) "Earlier Saturday, Karbala governor Akeel al-Khazaali had said the U.S. troops raided the provincial headquarters looking for wanted men but left with no prisoners, apparently unable to find their target.")
This is very hot close combat that we don't usally see anywhere outside Anbar, and almost never from Shia forces against the US. (Did they know they were attacking US personnel in the building?)
UPDATE, Sunday AM: This story is getting weirder and weirder.
The gunmen who killed five U.S. troops in the Shiite holy city of Karbala wore military uniforms and used vehicles commonly driven by foreign dignitaries — an apparent attempt to impersonate Americans, Iraqi officials said Sunday.....
In Karbala, provincial Gov. Akeel al-Khazaali, who was not at the security meeting....
"The group used percussion bombs and broke into the building, killed five Americans and kidnapped two others, then fled," the governor said, adding that Iraqi troops later found one of the SUVs with three bodies dressed in military uniforms......
There's just something about this that seems important.