Defence Secretary Des Browne yesterday described as "terribly sad" the death of a British soldier in Iraq.
It happened during an early morning raid to seize suspected terrorists in the southern city of Basra.
Mr Browne paid tribute to the soldier who died and another who was injured in the incident.
He said: "The death of one of our armed forces in Iraq is terribly sad news. I would like to offer my deepest condolences to their family and friends.
"I wish the soldier who was injured a speedy recovery and pay tribute to the bravery of both troops."
The soldiers were hit by small arms fire during the operation in the north of the city supported by helicopters and armoured Warrior vehicles.
Two men suspected of "serious crime and terrorism" were apprehended, the Ministry of Defence said.
The wounded soldiers were evacuated to the British hospital at Shaibah logistics base, where one of them died.
The MoD said: "We are in the process of informing next of kin. No further information on the identity of this soldier will be released until that process is complete."
British forces spokesman Major Charlie Burbridge said the intelligence-led operation had taken some time to plan, and targeted an individual "associated with terrorist activity".
He added: "We have been pleased with the outcome of the operation - it went according to plan. But we do mourn the loss of one of our soldiers."
The death brings to 114 the number of British service personnel killed in Iraq since the start of hostilities. There are now 7,200 British troops serving in Iraq.