BAGHDAD, Iraq — Ordinary Iraqis rarely strike back at the insurgents who terrorize their country. But just before noon on Tuesday a carpenter named Dhia saw a troop of masked gunmen with grenades coming toward his shop here and decided he had had enough.

As the gunmen emerged from their cars, Dhia and his young relatives shouldered their Kalashnikov rifles and opened fire, police and witnesses said. In the fierce gun battle that followed, three of the insurgents were killed, and the rest fled just after the police arrived. Two of Dhia's nephews and a bystander were wounded, the police said.

"We attacked them before they attacked us," said Dhia, 35, his face still contorted with rage and excitement as he stood barefoot outside his home a few hours after the battle, a 9-mm pistol in his hand. He would not give his last name.

"We killed three of those who call themselves the mujahedeen," he said. "I am waiting for the rest of them to come, and we will show them."

It was the first time that private citizens are known to have retaliated successfully against the insurgents. There have been anecdotal reports of residents shooting at attackers after a bombing or an assassination. But the gun battle on Tuesday erupted in full view of at least a dozen witnesses, including a Justice Ministry official who lives nearby.

The battle was the latest sign that Iraqis may be willing to start standing up against the attacks that leave dozens dead here nearly every week.

After a suicide bombing in Hilla last month that killed 136 people, including a number of women and children, hundreds of residents demonstrated in front of the city hall every day for almost a week, chanting slogans against terrorism. Last week, a smaller but similar rally took place in Firdos Square in downtown Baghdad. Another demonstration in the capital is scheduled for today.

Like many of the attacks here, Tuesday's fight had sectarian overtones. Dhia and his family are Shiite Arabs, and they cook for religious festivals at the Shiite Husseiniya mosque across from his shop. The insurgents are largely Sunni Arabs, and they have aimed dozens of attacks at Shiite figures, celebrations and even funerals.

The conflict has grown sharper in the past year, with Shiites dominating Iraq's new police force and army and holding a narrow majority in the newly elected national assembly.

In the past, Shiite religious leaders have counseled against revenge after attacks. But there are indications that some are no longer willing to turn the other cheek. Last fall an armed group called the Anger Brigade was formed after attacks on Shiite pilgrims south of Baghdad.