US and Iraqi troops raided a central Iraqi town on Saturday to rescue dozens of Shiite hostages whom Sunni rebels have threatened to kill if other Shiites did not leave town, a TV report said.

Interim National Security Minister of State, Kassim Daoud, told Dubai-based al Arabiya television that Madain, the town near Baghdad, was now under the control of Iraqi and US-led multinational forces.

"They are raiding areas where it is suspected that hostages maybe," the minister said.

In an incident likely to heighten sectarian tension between the majority Shiites and the Sunnis, masked Sunni militants on Saturday held scores of Shiite residents hostage in Madain and threatened to kill them unless all Shiites left the town.

A senior Shiite official in Baghdad said earlier US and Iraqi forces surrounding the town were expected to launch a big overnight raid to end the standoff.

"The number of hostages is 150. They include women and children,according to police intelligence officials I have spoken with," said the official.

Arabiya TV reported the rescue operation had already begun but no independent confirmation was immediately available.

Source: Xinhua