(Updates with more details, background) BAGHDAD, July 7 (Reuters) - One British soldier was killed in the southern Iraqi city of Basra overnight during the largest operation staged by British forces in the country this year, a military spokesman said on Saturday. Major Matthew Bird said around 1,000 British troops backed by tanks and aircraft battled their way through Iraq's second largest city to round up militants blamed for persistent attacks against Iraqi and British personnel. "British forces were exposed to a large number of attacks by IEDS (improvised explosive devices), RPGs (rocket-propelled grenades) and small arms, which resulted in the death of one British soldier and the injury of three others," the military said in a statement. Britain has recently cut its Iraq force to 5,500 from 7,000 and Shi'ite Prime Minister Nuri al-Maliki told new British Prime Minister Gordon Brown this week he wanted Iraqis to take over security in oil-rich Basra province within three months. The Shi'ite dominated south has been spared much of the sectarian violence wracking the rest of Iraq. But this relative calm has been fraying, as competing factions vie for control of the region's oil wealth. Mehdi Army militiamen loyal to fiery Shi'ite cleric Moqtada al-Sadr have clashed with police loyal to other Shi'ite blocs and violence has spread to other southern towns. Bird said British troops were immediately attacked as they entered the al-Jumhuriya district of Basra and that fighting continued for the duration of the raid. He said there had been several arrests of people suspected of being behind persistent mortar and sniper attacks on a joint command and control centre in the city, but declined to identify to which, if any, militia they belonged. The soldier, whose name was not released, was killed by a roadside bomb and aircraft were used to destroy at least one other roadside bomb blocking the operation's exit. More than 150 British troops have been killed in Iraq since the U.S.-led invasion in 2003. Military analysts expect Shi'ite militias to escalate their hostility as British forces draw down, in a bid to claim victory when they finally leave.