Suspected Al-Qaeda gunmen, some wearing army uniforms, raged through a western Iraq city Monday in a pre-dawn shooting spree that killed 27 policemen, including two officers killed execution-style.

The assault, launched at about 2:00 am (2300 GMT on Sunday), saw insurgents dressed in military uniforms simultaneously attacking two checkpoints in the east and west of Haditha before storming other security posts and raiding the homes of the two officers.

US State Department spokeswoman Victoria Nuland condemned the killings, telling reporters: "These attacks are again a blatant attempt by extremists to undermine the progress that Iraq is trying to make."

Monday's violence, the deadliest in Iraq since February 23, comes just weeks before an Arab League summit due to be held in Baghdad at the end of the month, preparation for which has been completed, Iraqi President Jalal Talabani said.

"We received 27 dead bodies, all of them policemen, and treated three policemen who were wounded," Fadhil al-Nimrawi, director of Haditha's hospital, told AFP. He added that the hospital also received the body of a gunman.

Anbar security chief Lieutenant General Abdulaziz Mohammed Jassim was fired in the wake of the attacks, deputy provincial council head Saadun Obeid Shaalan told AFP.

Haditha police spokesman Major Tareq Sayeh Hardan described the attack as beginning when "several armed men wearing security uniforms and carrying forged arrest warrants attacked several checkpoints."

"Al-Qaeda is responsible for this," Hardan said, noting that investigators found Al-Qaeda literature in a vehicle that the attackers left behind.

Officers offered conflicting accounts of whether the attackers were riding in stolen army vehicles, or 4x4s with fabricated insignia.

Security forces in the town imposed a vehicle curfew and shut down several main roads, an AFP journalist said, while reinforcements were being called in from the rest of Anbar province as police and soldiers hunted for the attackers.

According to police Lieutenant Colonel Owaid Khalaf, who said he was involved in some of Monday's firefights, the gunmen first attacked checkpoints at the eastern and western edges of Haditha.

"They then entered the town and were distributed throughout Haditha, where other gunmen were waiting for them in civilian cars," said Khalaf.

"More than 50 gunmen altogether started attacking checkpoints all over the town," he added, noting that at least one attacker was killed in the gunfights.

Khalaf said the attackers also targeted two senior police officers' homes -- Colonel Mohammed Hussein Shofair and Captain Khaled Mohammed Sayil. They killed three bodyguards at each of the officer's houses, and kidnapped both.

Shofair's body was found in a Haditha marketplace and Sayil was discovered in an alleyway, blindfolded with fatal gunshots to the head.

The attack in Haditha, 210 kilometres (130 miles) northeast of Baghdad, is the first major instance of violence in the town since a suicide bomber blew himself up inside a bank, killing nine people and wounding eight others in March 2011.

Monday was Iraq's deadliest day since a wave of attacks killed 42 people on February 23, and the first major attack on security forces since a suicide bomber struck a Baghdad police academy on February 19.

The violence comes ahead of a March 29 Arab League summit in Baghdad, the first non-emergency meeting of the 22-nation body to be held in the Iraqi capital in more than 30 years.

Talabani said in a statement on Monday that preparations for the summit were complete, "and Baghdad is now ready to receive the Arab leaders."

Haditha is in western Sunni Arab Anbar province. It was one of several towns along the Euphrates valley that became Al-Qaeda strongholds after the 2003 US-led invasion that ousted Saddam Hussein.

However, in 2006, local Sunni tribes sided with the US military and unrest dwindled in Anbar as rebel fighters were ejected from the region.

Violence across the country is down from its peaks in 2006 and 2007, but attacks remain common. A total of 150 Iraqis were killed in February, according to official figures.