Iraq's prime minister has ordered the lifting of all US and Iraqi military checkpoints around the Shia stronghold of Sadr City in Baghdad.
US troops have been checking vehicles in Baghdad's Sadr City
US forces put a security cordon around the area recently as they carried out searches for an abducted soldier.
The week-long restrictions, checks and searches caused increasing resentment in the densely-populated suburb.
The announcement came shortly after radical Shia cleric, Moqtada Sadr, called a general strike in protest.
The district is largely controlled by the Mehdi Army, a militia led by Moqtada Sadr.
Nouri Maliki, the prime minister, said he was lifting the measures to allow traffic to flow around the city in his "capacity as commander in chief of the armed forces".
A US military spokesman said that he was not aware of the order but told the AFP news agency that any concerns of the prime minister would be addressed "at the highest command levels".
But the BBC's correspondent in Baghdad, Hugh Sykes, says that the US has not said whether or not it will obey the Iraqi prime minister's order.
The area has seen brief clashes between US forces and the Mehdi Army since the blockade was imposed.
The BBC's regional analyst, Roger Hardy, says the announcement reveals the increasing tension between the Baghdad government and the US administration.
He says they are at odds over security issues, what to do about militias, and how best to achieve national reconciliation - especially with the country's aggrieved Sunni Arab minority.
The abducted man, an Iraq-born US serviceman was seized last Monday after leaving his base inside Baghdad's fortified Green Zone to visit Iraqi relatives in the city.
Meanwhile, violence has continued in the capital:
The US announced the death of two soldiers killed near Baghdad on Monday, bringing the monthly total to more than 100
AFP reported that Iraqi forces had captured the personal cameraman of Abu Musa al-Zarqawi's, according to a defence ministry spokesman
A car bomb killed three people and wounded at least five others in Sadr City in the early hours of Tuesday.