The fighting around the town of Hadid, about 10 kilometers north of the Diyala provincial capital of Baqouba, was in its third and deadliest day.
It comes on the heels of a warning last weekend by al-Qaida's leader in Iraq to push back into areas it was forced out of by the U.S. military. That threat was followed by a wave of violence that killed 115 people in the country's deadliest day in more than two years -- an assault for which al-Qaida claimed responsibility.
Diyala provincial spokesman Salih Ebressim Khalil said militants targeted the Iraqi army helicopter, killing one soldier, wounding another and forcing it to make an emergency landing. The rest of the crew was unharmed.
Overnight clashes left 11 federal policemen dead, Khalil said.
He said the clashes began Tuesday at a security checkpoint in a rural area near Hadid, located about 72 kilometers (45 miles) northeast of Baghdad. Federal police quickly locked down the area, but the fighting continued.
Diyala is a predominantly Sunni province that is sandwiched between Baghdad and the Iranian border. It has a large Shiite population, and well as pockets of ethnic Kurds, and long has been a battleground for Sunni insurgents trying to assert control. Its remote rural areas have served as a safe haven for insurgents, and posed a major challenge to Iraqi security forces.
In a statement posted on a militant site last Saturday, local al-Qaida leader Abu Bakr al-Baghdadi announced a new campaign dubbed "Breaking the Walls." He said it sought to undermine the nation's weakened Shiite-led government by realigning with Sunni tribes, and return to areas it was driven from before the American military withdrew from Iraq last December.
Al-Qaida's local wing in Iraq is known as the Islamic State of Iraq, and has for years had a hot-and-cold relationship with the global terror network's leadership.
Both shared the goal of targeting the U.S. military in Iraq and, to an extent, undermining the Shiite government that replaced Saddam Hussein. But al-Qaida leaders Osama bin Laden and Ayman al-Zawahri distanced themselves from the Iraqi militants in 2007 for also killing Iraqi civilians instead of focusing on Western targets.
Generally, al-Qaida in Iraq does not launch attacks or otherwise operate beyond Iraq's borders. But in early 2012, al-Zawahri urged Iraqi insurgents to support the Sunni-based uprising in neighboring Syria against President Bashar Assad, an Alawite. The sect is a branch of Shiite Islam.