Radical Shi'ite cleric Moqtada al-Sadr agreed today to disarm his Iraqi militia and leave a holy shrine but only after a truce with encircling US marines.
A senior aide said Sadr had demanded a ceasefire first with US-led forces in Najaf before disarming his Mehdi militia and leaving the Imam Ali Mosque.
Explosions and gun fire still echoed around the mosque hours after the announcement that Sadr had agreed to end a rebellion that has posed the biggest challenge to Prime Minister Iyad Allawi since he took over from U.S.-led occupiers on June 28th.
"Sayyed Moqtada and his fighters are ready to throw down their weapons and leave for the sake of Iraq," Mr Ali al-Yassiri, Sadr's political liaison officer, told reporters. "But they should stop attacking him first and pull away from the shrine."
Delegates at a meeting to choose an interim national assembly in Baghdad said Sadr had agreed to accept their demands to resolve the two-week crisis that has killed hundreds, spread to seven other cities and rattled world oil markets.
Sadr's fighters have holed up in the shrine in the heart of the southern city, hoping US and Iraqi forces will not dare to attack one of the holiest sites for Iraq's majority Shi'ites.
Mr Jalil al-Shumari, a delegate to the Baghdad meeting, read a letter from Sadr's office announcing the cleric had backed down.
"The agreement from Sadr came after many calls from Iraqi tribes, parties and citizens whom pressured him hard," he said.
Iraq's Defence Ministry tonight ordered Shi'ite militiamen in Najaf to immediately lay down their weapons and leave a holy shrine in the city.
The statement made no mention of an earlier demand by Sadr that US marines agree a truce before he would disarm his militia and leave the shrine.
Mr Hazim al-Shaalan had some six hours earlier said an assault was imminent on the golden-domed mosque.
"We are in the process of completing all our military preparations ... We will teach them a lesson they will never forget," Mr Shaalan said in the city after meeting local officials.
American marines and soldiers have been doing most of the fighting in Najaf, but Mr Shaalan said Iraqi forces had been training to storm the shrine complex and that US forces would not enter the sacred site.
Sadr's acceptance of the demands marks a sharp turnaround for the icon of Iraq's impoverished Shi'ite youth, who had threatened to fight to the death if necessary.
The scion of a Shi'ite clerical dynasty and aged about 30, Sadr is the most powerful opponent of the United States and the interim government.
The director of Najaf's main hospital, Mr Falah al-Muhana, said 29 people had been brought in killed or wounded in the clashes today, but there were no more precise figures. US casualties are treated at their own bases.
Apart from Sadr leaving the shrine, the delegates demanded Sadr's men lay down their weapons and the cleric and his men disavow violence and participate in elections set for January.
In Baghdad, an American soldier was shot dead while on patrol in a suburb that is a Sadr stronghold, the US military said. At least 707 US servicemen and women have been killed in action in Iraq since the start of last year's US-led invasion.
Insurgents also fired mortar rounds in Baghdad, with one landing near the venue for choosing the assembly. Two more mortar bombs were fired near the Interior Ministry in Baghdad. No casualties were reported in either attack.