Prime Minister Ayad Allawi will send Iraqi troops to Najaf to battle a Shiite Muslim militia, Iraqi officials and U.S. commanders said Saturday after peace talks collapsed between the interim government and rebellious cleric Moqtada Sadr.

"The army will be deployed now" to the city, where U.S. forces have been fighting the militia, said Sabah Kadhim, a spokesman for the Interior Ministry. Units of the new Iraqi army would immediately prepare for an offensive aimed at evicting Sadr's Mahdi Army from the shrine of Imam Ali, a sacred site the militia has used as a refuge, he said.

News of the deployment -- the first since sovereignty was restored to Iraq on June 28 -- reached U.S. forces just as scores of tanks, armored troop carriers and Humvees lined up inside the gate of the main U.S. military base in Najaf, apparently preparing for significant combat operations just hours after a two-day truce had been called off. They then turned around and went back into camp.

A U.S. commander spread the word that missions were being scrubbed, conveying a message written on a Post-it note that the prime minister was angry and was "sending Iraqi Army to settle the problem."

The decision to push the U.S. military to the background in Najaf, regarded as the holiest city in the country, underscored the pitfalls Iraqi officials face in using U.S. forces to battle insurgents who still view the country as occupied.

"The occupation has to go out of Iraq," Sadr said on al-Jazeera, the Arabic satellite television network. "Iraq is ours. The wealth is ours. The land is ours. The Iraqis can govern Iraq. There will be no civil war, as the U.S. says."

The matter is extraordinarily sensitive in Najaf. Ali, the son-in-law of the prophet Muhammad, is regarded by Shiites as his rightful successor and is revered by Muslims.

The deployment of the Iraqi army "will help increase the distance" between Iraqi and U.S. forces, Kadhim said. U.S. Army and Marine units in the Najaf area would reinforce Iraqi army operations.

Attempting to flush out Sadr's militia from the shrine will be "quite an undertaking," he said. "There's a lot of weaponry that has been installed in there. There are many tunnels under the ground. It's a very complex structure."

Kadhim said the new army battalions, which are better trained and have more sophisticated equipment than other Iraqi security forces, would augment police and national guard units in the area. "Quite frankly, we don't have adequate police and national guard forces to deal with" the Mahdi Army, he said. "And we don't want the [U.S. forces] to go in" to the shrine.

U.S. commanders on the ground in Najaf applauded the decision to call in Iraqi troops.

"I think the reason Allawi called us off is this would've turned quickly into the occupier versus the defender of the holy shrine, no matter what the truth is," said Maj. David Holahan of the 11th Marine Expeditionary Unit, which took formal control of Najaf five days before the fighting began. "The city would've been damaged, and Sadr would have gained in popularity."

"It's healthy in the fact that they want to take charge," said Army Lt. Col. Myles Miyamasu, commander of the 1st Battalion, 5th Regiment, 1st Cavalry Division, which reinforced a Marine battalion after intense fighting broke out Aug. 5. "It'll be interesting to see what the Iraqi forces can do. And you know we have to just be patient with them."

Khadim declined to say which Iraqi units would be used in Najaf. The Iraqi army has seven trained and deployable battalions, two of which have undergone additional instruction in counterinsurgency warfare.

One battalion of Iraqi commandos is already in the city. The unit, previously known as the 36th Battalion, was trained by U.S. Special Forces and fought alongside U.S. forces in Fallujah in April. Another Iraqi battalion, trained by regular U.S. army troops, refused to fight. The commando unit raided a mosque in Kufa this week, supported by a Marine unit that was kept at a distance.

"Everyone wants to go ahead and finish this," a senior official in the interim government said, speaking on the condition of anonymity. The official said Allawi and his senior ministers are concerned that a protracted standoff would give Sadr more time to harden his defenses and spark instability in other parts of the country.

Earlier Saturday, Iraqi officials reported that 43 people were killed in clashes in Hilla, making the city about 60 miles south of Baghdad the latest in southern Iraq to be roiled by Shiite militiamen this week.

Meanwhile, in the Sunni heartland to the north of the capital, the U.S. Army reported killing 50 people it identified as insurgents after dropping a series of 500 pound bombs in Samarra. An Iraqi police official, Maj. Saadoun Dulaimi, put the death toll at 12, including three policeman, the Associated Press reported.

In Najaf, a city of about 600,000, the sometimes intense clashes since Aug. 5 have left hundreds of militiamen dead, according to U.S. commanders. Six U.S. servicemen and about 20 Iraqi police officers were also reported killed in the fighting before the truce took effect early Friday, one day after the U.S. military mounted an offensive.

The offensive began with the 7th Regiment of the Army's 1st Cavalry Division encircling the old city surrounding the sacred shrine at a radius of about a mile, while Marine and other Army units began a series of raids on Mahdi Army sites. It stopped abruptly early Friday when Mowaffak Rubaie, the national security adviser to the prime minister, accepted Sadr's invitation to discuss a settlement. But Rubaie gave up Saturday evening without having seen the junior cleric, the son of an esteemed grand ayatollah who was assassinated in 1999.

"Three days ago, Moqtada asked me to come to Najaf," Rubaie told reporters summoned to the office of the Najaf provincial governor. "And we achieved some things, including the cease-fire, the medical and food aids that went to the Mahdi Army and other people, and allowing car ambulances inside the city.

"But for three days we couldn't meet up with Moqtada Sadr. We think there are some people who do not want this meeting to happen because they know this meeting would end the crisis."

A Sadr aide told the al-Arabiya satellite television network that the Iraqi government ignored an agreement Sadr had signed and was insincere about peace talks.

"They tricked people by these negotiations because they saw people angry, and they wanted to calm them down," said Ahmed Shaibani, a Sadr spokesman. "We are positioned to defend ourselves, not to attack. We have our followers of Mahdi Army around the shrine of Ali to protect it. We will defend the city."

But other Iraqi officials sought to distance Rubaie's effort from Allawi, who had vowed not to negotiate with Sadr and had demanded that he disband his militia, renounce violence and make his movement exclusively political.

"We are not negotiating," Kadhim, the Interior Ministry spokesman, said. "Unless they are prepared to do what we're asking them to do . . . we will continue until this matter is settled. Iraqis do not want to see this thing repeated every few months."

One U.S. commander indicated that U.S. forces might resume combat later in the week, after a sensitive political conference ended.

The national conference, aimed at selecting members of a new national assembly, will begin a three-day meeting in Baghdad on Sunday despite the violence across central and southern Iraq, Fouad Masoum, the chairman of the conference, said Saturday.

More than 1,300 delegates are scheduled to participate in the meeting, Masoum said. Under a political transition plan designed by the United Nations, the participants will choose 100 people to serve in an interim assembly.

Chandrasekaran reported from Baghdad. Special correspondent Saad Sarhan in Najaf contributed to this report.

Demonstrators display a picture of radical Shiite cleric Moqtada Sadr in Najaf. Peace talks between the Iraqi government and Sadr representatives collapsed.