Iraq's Shiite Muslim establishment has launched a concerted effort to transform Moqtada Sadr's Mahdi Army militia into a political movement and enlist the defiant Shiite cleric along with his anti-U.S. followers into the political process leading to national elections next January.

The effort was the political backdrop to an agreement Friday that sealed a cease-fire between Sadr's militia and U.S. occupation troops in the Najaf region, 90 miles south of Baghdad, after two months of bloody clashes, according to Shiite officials who helped negotiate the accord. A heralded meeting Saturday between Sadr and Grand Ayatollah Ali Sistani, Iraq's most respected and influential Shiite cleric, was designed to cement the truce and show the upstart cleric and his radicalized followers that Sistani and the religious establishment respect his views, the officials said.

The recruitment effort is based on the premise that Sadr leads a significant portion of Iraq's 60 percent Shiite majority and must therefore be part of Iraq's postwar politics if Shiites are to become a coherent political force. As a result, it clashes with the U.S. occupation authority's stand that Sadr is an outlaw -- a "thug" in President Bush's words -- whose movement must be disbanded and who must stand trial before an Iraqi court on charges that he conspired in the murder of a fellow cleric.

"Moqtada Sadr must face Iraqi justice," declared Daniel Senor, a spokesman for the U.S.-run Coalition Provisional Authority.

At the same time, U.S. military officials have dropped their previous talk of capturing Sadr; he appears in the open regularly for Friday prayers. In any case, the U.S. occupation authority ends June 30, when Iraq's interim government recovers national sovereignty, at least in name, and the decision about Sadr's fate in theory would then fall under Iraqi jurisdiction.

Adnan Ali, a senior leader of Dawa, a Shiite religious party, said much of the trouble that U.S. forces have had with Sadr's militia in Najaf, the neighboring city of Kufa and the Baghdad slum of Sadr City can be traced to a U.S. decision two months ago to move against his organization, close its newspaper and arrest one of his chief lieutenants. "We feel the crisis was a penalty we paid because they were left out of the political process," Ali said Sunday in an interview.

The question now, Ali said, is the degree to which Sadr will move to make sure his followers and their ragtag militia really do put away their weapons and turn their energy to political work, as discussed in the Najaf cease-fire talks. As enticement, he added, they are likely to be offered slots in a national conference of about 1,000 Iraqi leaders scheduled to convene next month to choose a legislature-like assembly of 250 to 275 members that will supervise the interim government of Prime Minister Ayad Allawi.

Shiite political leaders, including members of the Dawa party, are eager to bring Sadr and his followers into the process because that would reinforce chances of a dominant political role for Shiites in the government that emerges from elections scheduled for January. A split Shiite electorate, or a section of the Shiite majority that refuses to participate, could undermine the power of having a 60 percent majority among Iraq's 25 million inhabitants, they fear.

"The unity of Shiites is very important as we are moving toward sovereignty," Ali said.

Ahmed Shaibani, a spokesman for Sadr in Najaf, said Sistani and Sadr discussed transforming the Mahdi Army into a political movement but did not come to any specific conclusion. The subject, he added, is under intense discussion among Sadr followers, Shiite political leaders and the supreme Shiite religious authorities under Sistani.

"In the next days, there will be important discussions to work out the active role of the Mahdi Army and its conversion into a political organization," said Abdul Hadi Darraji, Sadr's spokesman in Baghdad. "But this will not happen under the authority of the occupation or the interim government. It is up to Shiite religious authorities whether they dissolve the army or convert it into a political movement."

Hassan Adhari, who runs Sadr's headquarters in Sadr City, the Shiite-inhabited area of 3 million people in eastern Baghdad where the cleric has his base, said the militia's members are not formally military and thus could easily participate in January's elections as a political party. But he made it clear that while the discussions continue, Mahdi Army fighters in Najaf and Kufa will put away their weapons but not abandon them altogether.

Under the truce accord, they pledged to avoid any armed presence in the two cities and allow Iraqi police to ensure security, while U.S. forces were urged to stay away from the Shiite shrines in the area to avoid provocation.

As the Najaf area has calmed down, clashes in Sadr City between U.S. occupation forces and armed Sadr followers have erupted almost daily. Adhari said the street confrontations are likely to ease now, though, because on Sunday morning U.S. soldiers abandoned a police station they were using as a fortified outpost deep in the slum.

The station, painted pastel blue, sat empty and half-destroyed Sunday afternoon, with a crowd of young men gathered outside to view the rubble. Residents explained that Mahdi Army gunmen had set off explosives to destroy the building shortly after the U.S. soldiers left, seeking to guarantee that they would not return.

A roadside bomb exploded nearby, however, as a U.S. military convoy passed later on Sunday, Iraqi police told reporters. The blast caused no injuries to the U.S. soldiers but killed a 14-year-old boy and injured two Iraqi policemen, the Associated Press reported. Another bomb beside an avenue just outside Sadr City killed two U.S. soldiers Saturday and wounded two others. Five U.S. soldiers were killed and five were wounded Friday in an ambush in the same neighborhood.

To the north of Baghdad, insurgents set off a car bomb at a base shared by U.S. and Iraqi military personnel on Sunday, killing nine people. More than 20 others were wounded, U.S. officers on the scene told reporters. The blast was part of an intensified campaign of shootings and bombings in the weeks leading up to June 30, but did not appear connected to the situation in Sadr City.

Assailants using automatic rifles killed seven policemen Saturday after taking over a police station in Musayyib, 40 miles south of Baghdad, witnesses said Sunday. Before they left, the insurgents planted timed explosives that went off and killed four civilians who had come later to see what happened to the policemen, they added.

Special correspondents Huda Ahmed Lazim in Baghdad and Saad Sarhan in Najaf contributed to this report.

Iraqi Shiite cleric Moqtada Sadr, shown Thursday, later met with the respected and influential Grand Ayatollah Ali Sistani to cement a cease-fire.