Iraq's national conference has voted to send a team to Najaf to try to end a stand-off between US-led forces and supporters of Shia cleric Moqtada Sadr.
Sadr is said to be surrounded by thousands of supporters
Sporadic clashes were reported on Monday, as militiamen remained barricaded inside the Imam Ali shrine.
A spokesman for Mr Sadr said he was ready to discuss any peace initiative.
The 11-day uprising in Najaf has dominated debate at the national conference in Baghdad, which will elect an interim council.
The United Nations special envoy to Iraq, Ashraf Qazi, told the BBC the UN was also willing to take a negotiating role in the holy city.
Baghdad Shia cleric Sheikh Hussein Sadr led a call at the Baghdad conference for his relative in Najaf, and his Mehdi Army militia, to join the political process.
"There are inviolable conditions in civilised countries, particularly that there is no place for armed militias," he said.
"We must work together to convince Moqtada Sadr and the dear
brothers in the Mehdi Army to transform into a
political party whatever its leaning," he added.
His proposal to send a delegation to the holy city was backed by a majority in a show of hands.
Religious and political leaders are meeting to elect a 100-member council to oversee the interim government ahead of elections due in January.
Militia on streets
The government has insisted that the Mehdi militia should disarm and leave Najaf.
NATIONAL CONFERENCE FACTS
Conference aims to choose an Interim National Council of 100 members
The Interim National Council will help and oversee, advise and question government policy
National Council can veto orders or decrees from the Council of Ministers by a two-thirds majority vote
National Council can appoint replacements to the presidency in the event of death or resignation and can approve the national budget
This has been rejected by
Mr Sadr, who last week said he was willing to fight to the death.
However on Monday an aide to Mr Sadr said a negotiated settlement was possible.
The spokesman, Sheikh Ahmed Shaibani, was quoted by AFP news agency as saying: "We are ready to defend ourselves as we are ready for peace."
Mr Shaibani also called on tribal chiefs throughout Iraq to travel to Najaf to form human shields to protect the Imam Ali shrine.
In an interview with al-Jazeera television, Mr Shaibani said it was "inconceivable" that the Mehdi army will be disarmed.
A number civilians supporters of the radical cleric are reported to have taken position nearby, to try to prevent an assault.
Mr Sadr is thought to be inside the shrine - one of the holiest sites of Shia Islam - surrounded by crowds of supporters.
Najaf residents quoted by Reuters news agency said Shia militiamen were roaming the streets around the Imam Ali Mosque and an ancient cemetery nearby, which has been the focal point of recent fighting.
The Iraqi interior ministry said it had ordered Iraqi and US forces not to attack the mosque itself.
However a number of clashes were reported on Monday.
The US military said that three of its soldiers were killed in Najaf on Sunday.
Journalists have been ordered to leave the city.