UPDATE 1-23 prisoners escape in restive Iraqi city of Mosul

(Updates with prison break, previous BAGHDAD)

MOSUL, Iraq, April 2 Twenty-three prisoners convicted of terrorism charges escaped from a prison in Iraq's turbulent city of Mosul on Friday, police said.

The inmates fled through a hole they made in a wall at Ghazlani prison in the southern area of the city, which is an al Qaeda stronghold about 390 km (240 miles) north of Baghdad. The escape happened in the morning but prison guards did not discover it until the afternoon, police said.

Authorities alerted military and police checkpoints in the city to be on the lookout for the escapees. Police said there were al Qaeda militants and other "high value" detainees among those who escaped.

Mosul has seen a number of big prison breaks. Three years ago, dozens of al Qaeda-led militants stormed Badoush prison and freed up to 140 prisoners.

In December 2006, the nephew of Iraqi dictator Saddam Hussein escaped the same prison after he was accused of financing the Sunni insurgency against U.S. forces.

Violence has dropped dramatically in Iraq in the last two years after sectarian warfare that killed tens of thousands of people, but Mosul still sees daily bombings and attacks.

In recent days U.S. and Iraqi troops have killed or arrested at least six suspected al Qaeda leaders accused of involvement in an extortion and assassination ring in northern Iraq, the U.S. military said.

The suspects were accused of involvement in an extortion and assassination network that helped fund al Qaeda around Mosul. Its targets included oil companies and small businesses, the statement said.

Those killed were identified as the al Qaeda emir of northern Iraq, Khalid Muhammad Hasan Shallub al-Juburi; economic security emir Abu Ahmad al-Afri; and the suspected al Qaeda governor of Mosul, Bashar Khalaf Husyan Ali al-Jaburi.

The military said three top suspected oil-extortion figures were among a dozen people arrested on March 24 in a security sweep.

"Without these individuals in the AQI (al Qaeda in Iraq) network, it is expected that AQI's ability to operate and restructure will be severely hindered," it said.

The joint U.S.-Iraqi operations were carried out pursuant to a warrant from an Iraqi judge.

(Reporting by Jamal al-Badrani and Ian Simpson; editing by Ralph Boulton)