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Last Updated: Friday, 20 August, 2004, 22:39 GMT 23:39 UK
Tension reigns in Iraqi holy city
Gunmen loyal to Moqtada Sadr
The reported withdrawal followed a night of intense fighting
Deadlock continues in the Iraqi holy city of Najaf, despite reports that Shia gunmen loyal to Moqtada Sadr had agreed to leave their stronghold.

An earlier announcement of a deal to end the two-week uprising has failed to halt fighting between the cleric's Mehdi Army militia and US-led troops.

National security adviser Mouwaffaq al-Rubaie told the BBC government forces do not control the Imam Ali shrine.

A spokesman for Mr Sadr has reportedly said the uprising is not over.

The spokesman, contacted by Reuters news agency, said the rebels had not left the shrine, but were preparing to hand it over to Iraq's top Shia authority.

The Iraqi interior ministry and the US military both told Reuters that Mr Sadr was rumoured to have fled overnight from the shrine complex, which had been used by rebels as a base against US-led forces.

Click below for Digital Globe satellite image of Najaf

The interior ministry said that Iraqi police had moved into the shrine, accompanied by clerics, and 400 militiamen were said to have been detained.

But journalists who had recently been in the shrine reported a relaxed atmosphere, with no sign of Iraqi police.

The BBC's Kylie Morris in Najaf said that, according to reporters who had been to the complex, the inner mausoleum was now locked, with no Mehdi Army fighters inside it.

Mr Rubaie told the BBC's Newsnight programme there were "signs" that the rebels were leaving the shrine - but that they were not fulfilling the government's demand to disband.

Sergeant Troy Hawkes, a US military spokesman in Iraq, told the BBC that US forces' actions in Najaf were "all defensive operations right now," but "air power if required may be called in".

Volatile

The latest developments came after the heaviest night of shelling of militia positions since the rebellion began.

HAVE YOUR SAY
I praise all the heroes from the Mehdi Army, and above all Moqtada
Abu Yussuf, Sadr City, Iraq

US warplanes dropped bombs and tanks shelled rebel positions in a five-hour onslaught.

The Iraqi health ministry said 77 people were killed and 70 others wounded in fighting in Najaf since Thursday.

Elsewhere in Iraq:

  • A group called the Ansar al-Sunna Army claims to have seized 12 Nepalese workers for co-operating with US forces in Iraq, in a statement posted on an Islamist website

  • Two US marines die in separate incidents in the restive Anbar province, west of Baghdad, the US military says

  • US army medics are accused of being complicit in the abuse of Iraqi inmates at Abu Ghraib prison, outside Baghdad.

On Friday, before reports of a withdrawal from the Najaf mosque began to circulate, a spokesman for Mr Sadr, Sheikh Ali Shaibani, said the cleric would not comply with the government's demand to disband his Mehdi Army and vowed to fight on.

But interim Prime Minister Iyad Allawi said the "olive branch is still extended" to Mr Sadr.

Speaking to the BBC a day after issuing a "final call" for Mr Sadr's Mehdi Army to leave the shrine and disband, Mr Allawi said: "We have extended and still extend an open hand to Moqtada Sadr.

"He can join the political process and he is welcome to."

Mr Allawi said fighters sheltering in the shrine included "ex-criminals [who] have wired up the holy shrine to blow it up".

Al-Qaeda fighters were also inside, he said.




WATCH AND LISTEN
The BBC's Keith Breene
"Sporadic fighting has continued on the streets"




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