The first Iranian reactions to the latest developments in Najaf have portrayed the peace deal brokered by Ayatollah Sistani as a major setback for the US.
By Sebastian Usher
BBC World media correspondent
The US siege of the holy city of Najaf inflamed Iranian opinion
State radio said the agreement had frustrated US plans to disable Iraq's Shia as a political force.
And in his Friday sermon, the still influential former Iranian President, Ali Akbar Hashemi Rafsanjani, said events in Najaf - which he compared to Stalingrad - should alert the West to the power of the Islamic clergy.
The Iranians have played a waiting game over Najaf, with senior officials from the president downwards fiercely denouncing the use of military force there by the Americans while never officially committing themselves to full-blown support for Moqtada Sadr and his followers.
This strategy allowed Iran to show solidarity with the Shia uprising while avoiding a complete break with the other important Shia political forces in Iraq.
And throughout the crisis, Iran remained consistent in its backing for Ayatollah Sistani and his position.
Now, the apparent success of his peace initiative in Najaf has given Tehran an opportunity to revel in what it sees as the frustration of America's strategy.
In his Friday sermon, Ali Akbar Hashemi Rafsanjani - who remains one of the most powerful political figures in Iran - told his congregation that American power had been humbled.
"Today, Najaf is prouder than Stalingrad," he said.
"In contemporary history, Stalingrad is a symbol of resistance.
"But in the alleys and streets of Najaf, a small number of people fought this well-equipped army, which used cluster bombs and sometimes even dangerous material and dangerous gases in their attacks, but failed to open the gates of the city."
The Ayatollah's return: Iranians were reminded of events in 1979
Speaking in the same vein, Mr Rafsanjani made a further comparison - even more emotive for his audience - this time over what he described as Ayatollah Sistani's courage in returning to Iraq.
"Of course, with a slight difference, it resembled Imam Khomeini's return from Paris to Tehran."
"At the time, the Imam insisted on returning despite the fact that the Shah's army, police and secret agents were guarding the city streets."
"The Imam's manoeuvre on that day broke the back of the Shah's regime," he said.
Mr Rafsanjani's sermon, accompanied by the sound of the congregation chanting "God is great" and "Death to America", was broadcast live on Iranian state radio.
The radio station earlier issued its own commentary on the Najaf deal, portraying it as a "major defeat for America".
It said the US had tried to divide the Shia in Iraq and drive them from the political stage - but had failed.
One sign of how much Iranian feeling has been stirred up over Najaf was a mass anti-American protest march to the Iraqi border that had been planned for this coming Monday.
That has now been called off - but the sense that Najaf marked a new stage in the simmering hostilities between America and Iran remains palpable.