"Iraq has achieved a victory today," Dawood said at a Thursday night news conference. "No more fights. Najaf and Kufa will be peaceful cities, free from arms, free from militias."
The accord was reached on a day when more than 45 people died in a mortar attack and other violence in Najaf and the neighboring town of Kufa, which are about 90 miles south of Baghdad.
Chanting Iraqi Shiites converge on Najaf's Imam Ali shrine after a peace deal was reached overnight to end a three-week uprising.
(Chris Helgren - Reuters)
_____Peace Deal Reached_____
Video: Thousands of pilgrims streamed into the Imam Ali shrine in Najaf Friday after a peace deal by the top Shiite Muslim religious figure in Iraq.
_____Battle for Najaf_____
Who Is Sadr? More on the Shiite cleric whose Mahdi Army has been fighting U.S. and Iraqi troops.
Under its terms, members of the Mahdi Army -- a well-armed militia that numbers in the low thousands, will be allowed to leave Najaf and return to their homes without any sanction, despite having fought against U.S. and Iraqi security forces for three weeks.
Sadr, who has reneged on peace deals in the past, did not issue a statement of acceptance, but senior government officials and a top aide to Sistani expressed optimism that Sadr would comply with the terms of this agreement, which was reached during a meeting between Sistani and Sadr. "Mr. Moqtada Sadr has agreed to the proposals from his eminence, Ayatollah Ali Sistani," said Sistani's top aide, Hamed Khafaf.
The U.S. military, which ceased offensive operations on Thursday because of the peace talks, did not withdraw from positions inside Najaf after the deal was announced. Dawood said U.S. forces would be instructed to "draw back" by the interim prime minister, Ayad Allawi, once Sadr's militia departs.
The arrangement was a vivid indication of the enormous clout Sistani wields among Iraq's Shiites. His objections to American plans for Iraq's political transition forced the U.S. occupation authority to make substantial changes on two occasions. But in recent months, some political and religious leaders wondered whether Sistani, a reclusive 73-year-old who believes in the separation of religion and government, was losing followers to Sadr, a mercurial man in his early thirties who lacks Sistani's clerical credentials but plays a more activist form of street politics.
Last week, Sistani's aides demanded that Sadr hand over the keys to the shrine, but Sadr's aides refused, insisting that a transfer had to be done on their terms. The exchange seemed to suggest that Sistani lacked the power to rein in Sadr.
But Thursday's compromise indicated Sistani was still the most influential cleric in Iraq, a man who can force both Sadr and the interim government to yield to his middle-ground approach. When Sistani arrived in the southern port city of Basra on Wednesday after a trip to Britain for treatment of a heart condition, Dawood and another cabinet minister flew to meet him and discuss his peace plan. Shortly after Sistani's police-escorted convoy reached Najaf Thursday afternoon, Sadr came calling.
"Sayyid Ali Sistani has played a very important role in bringing about peace," said Dawood, using the honorific reserved for descendants of the prophet Muhammad.
The deal also revealed the limits of the power of Iraq's interim government. Allawi and other senior officials had sought to avoid any resolution that would allow Sadr's militia to reconstitute itself, favoring the use of force to kill or capture as many militiamen as possible. But because the government could not rely on its security forces alone to deal with the threat, it was forced to seek assistance from the U.S. military. That put the government in an untenable position: If U.S. forces stormed the shrine, Shiites would be outraged, but if they didn't, Sadr's men could drag out the confrontation for weeks.
A senior Iraqi official, speaking on condition of anonymity, acknowledged that Sistani's deal will allow the militiamen to return unchallenged to their homes in Baghdad and other Iraqi cities. "We're going to let most of them get away," the official said.
But the official expressed hope that by ending the standoff and allowing Sadr's supporters to participate in politics, the plan would cause the militia to be weakened and eventually demobilized. "If the shrine is clear, it will help us pursue our main objective of dismantling his militia," the official said.
Other Iraqi officials and Western diplomats in Iraq contend that any deal that allows Sadr and many of his most loyal followers to escape will pose an continuing threat to the interim government. The militia does not have a formal roster of members who can be offered jobs or cash incentives to lay down their weapons. And as long as Sadr, who has been charged with murder in the death of a fellow cleric, remains free to preach and rally his loyalists, he will have the power to reconstitute a militia, the officials and diplomats said.
Under the terms of the agreement, Najaf and Kufa would become "demilitarized zones" that are off-limits to militias and foreign military forces; only Iraqi police and National Guard units would be permitted to patrol the areas. Sistani also demanded that the interim government compensate residents whose homes were destroyed in the fighting.