wp_query inside the_loop

You can also try with following code:

$featured = new WP_Query( array( 'category_name' => $category, 'posts_per_page' => 3 ) );

// The Loop
if ( $featured->have_posts() ) {
    echo '<ul>';
    while ( $featured->have_posts() ) {
        $featured->the_post();
        echo '<li>';
        echo '<div id="title">' . get_the_title() .'</div>';
        echo '<div id="content">' . get_the_content() .'</div>';
        echo '</li>';
    }
    echo '</ul>';
}