Iraqi Prime Minister Ayad Allawi said yesterday that he is negotiating an amnesty with militant Shiite cleric Moqtada Sadr and is prepared to offer the same deal to insurgents willing to surrender their arms and end the campaign against the new Iraqi government and U.S.-led multinational force.

Despite Sadr's call Friday for ongoing resistance to U.S. forces, Allawi said he met with a delegation from Sadr's Mahdi Army over the weekend to discuss dismantling the militia as a precondition for Sadr to join the political process taking shape since the U.S.-led occupation ended a week ago. "He is looking for an amnesty. He is looking to be part of the political process," Allawi said on ABC's "This Week."

Offering both carrot and stick, he said his young government will not tolerate ongoing activities by any militia. "Everybody should follow the bounds of the law, whether it's Moqtada Sadr or anybody else," Allawi said.

But he also said the interim government would "welcome" any Iraqi who is willing to respect law and order. "It's for every Iraqi citizen to be part of the new and democratic Iraq. Anybody who respects the rule of law and the human rights is welcome to be part of Iraq," he said.

In Baghdad yesterday, Sadr denounced the new government as "illegitimate and illegal," adding, "We demand complete sovereignty and independence by holding honest elections."

Sadr vowed "to continue resisting oppression and occupation to our last drop of blood," the Associated Press said a statement from his office in Najaf said.

On television, Allawi said the government hopes that showing former president Saddam Hussein in court will make rebels "see daylight" and repent.

Pressed on the biggest change since the occupation ended, Allawi said that the first week of interim Iraqi rule was marked by a drop in insurgents' attacks, though he predicted that terrorist attacks could still increase. Iraq's new national security team is preparing a public safety law, a version of martial law, and other measures to impose if the turmoil escalates, he said.

To deal with the more difficult problem of foreign fighters, Allawi said he has written to neighboring countries, particularly Syria and Iran, for help in cutting off illegal border traffic and aid or arms destined for such forces.

"Governments are trying to help. We want them to help more. We will be shortly negotiating with both governments," said Allawi, a doctor who led the CIA-backed Iraqi National Accord in exile.

The Syrian government of President Bashar Assad has communicated "very positive views," which Allawi said he hopes to develop into "something concrete" for the benefit of both nations. Former U.S. officials in Iraq say the Syrian border has been the most consistent problem and main conduit for hundreds of foreign fighters over the past 15 months. Syria's ruling Baath Party has also provided funds and aid for remnants of Hussein's Baath Party, who make up most of the insurgents, a former senior U.S. official in the Coalition Provisional Authority told journalists in Washington last week.

But Baghdad has not heard from Iranian President Mohammad Khatami. During Hussein's rule, Iraq and Iran fought a war from 1980 to 1988, which was the bloodiest Middle East conflict in the past half-century. If Iraq receives a positive response from Tehran, Allawi said he would be willing to offer "the hand of friendship and peace" to help develop mutual interests.

The Iraqi leader, who said he has not decided whether to run in the first elections, to be held by January 2005, praised Jordan and Yemen for offering troops. "We do want to expand and get troops from various countries, especially Arab and Islamic countries," he told ABC. "We hope that other countries . . . would join in helping Iraq in its hour of need."

L. Paul Bremer, the former U.S. administrator in Iraq, predicted yesterday that Iraq's new democracy will go through many "ups and downs."

"We should not kid ourselves. It will be sloppy and messy at the beginning," he said on "Fox News Sunday." "People forget it took up 12 years to write our own Constitution. It wasn't very pretty around here either between 1776 and 1787."