Shiite cleric Moqtada Sadr has ordered his militiamen to suspend attacks on U.S. and Iraqi forces and intends to participate in politics instead of pursuing an armed rebellion, his aides said Monday.

A shift by Sadr and his supporters away from violence could resolve a significant threat to Iraq's stability and provide a boost to the country's interim government, which has urged the cleric to dissolve his Mahdi Army militia and join the political process. Sadr, a rebellious young religious leader who wants U.S. forces to leave Iraq, has sparked unrest across central and southern parts of the country since April.

"Moqtada Sadr called on the Mahdi Army to cease fire in all of Iraq until the Sadr office announces its plans to participate in the political process," one of Sadr's representatives, Ali Yassiri, said in a telephone interview.

The order brought about immediate changes in Sadr's strongholds, particularly in Sadr City, a Baghdad slum named after Sadr's revered father, where fighting between the Mahdi Army and U.S. soldiers has raged for almost a month. In a break from the bedlam of previous days, no significant clashes were reported in Sadr City on Monday.

Sadr's representatives held a second day of talks with U.S. and Iraqi officials aimed at brokering a broad peace deal. On Friday, Sadr agreed to remove his militiamen from the cities of Najaf and Kufa. The deal ended a three week standoff around a Shiite shrine that involved intense fighting between U.S. forces and Sadr's militiamen.

The talks on Monday appeared to involve more senior U.S. and Iraqi officials than Sunday's discussions. Instead of continuing in Sadr City, talks were held inside the high-security International Zone. U.S. diplomats and officials with Iraq's interim government have insisted they are not negotiating, only articulating their demands and working out details of how a peace deal would be implemented.

Sadr's aides have characterized the talks as negotiations. One of their chief demands, according to Ali Smeisim, a Sadr deputy, is for U.S. forces to withdraw from the center of Iraqi cities. Although Iraq's interim government agreed to such a condition in Najaf and Kufa, which are considered Shiite holy cities, it is questionable whether officials would accede to that demand elsewhere.

There also have been disagreements about what Mahdi Army members should do with their weapons. The Iraqi government and the U.S. military want the weapons to be handed over to the police, but Sadr's representatives have insisted that the militiamen be able to take their guns home for personal protection.

After Sunday's meeting, which was attended by representatives from the Iraqi police force, Iraq's interim prime minister, Ayad Allawi, suggested that his office deal directly with Sadr's representatives, a senior police official said. Allawi is also meeting directly with resistance fighters to persuade them to accept a government amnesty offer in an attempt to quell insurgent attacks in Sunni Muslim areas.

Yassiri suggested that an agreement had been reached late Monday after lengthy discussions. "The negotiations were fruitful, and all sides accepted the points of the agreement," he said. "All sides went out satisfied with the results."

He said details of the agreement would be announced Tuesday. Other Sadr aides and Iraqi government officials who participated in the discussions could not be reached for comment.

A spokesman for the U.S. Army's 1st Cavalry Division, which patrols Baghdad, said a peace deal had not been reached. "There has been no cease-fire agreement and there is no move to withdraw multinational forces from Sadr City," the spokesman, Lt. Col. James Hutton, said.

There were conflicting reports Monday about whether Iraq's oil exports had halted after the repeated sabotage of oil pipelines in the south. The Associated Press quoted the governor of the southern port city of Basra, Hassan Rashid, as saying that exports from the south had stopped completely. But an unnamed official with the state-run South Oil Co. said the oil flow in the south continued unabated.

The confusion over the oil flow illustrated the degree of chaos in the Iraqi oil industry, which has suffered from frequent attacks and fluctuations in production.

"There are rumors that it's been turned off. What we know is that it's been disrupted, and that's the point," said Walid Khadduri, an oil expert who is editor of the Cyprus-based Middle East Economic Survey.

Iraq earns $60 million to $70 million a day from exports at current market prices, Khadduri said. He also said that oil exports have been falling for days because of attacks.

Five feeder pipelines in the southern Rumaila oil fields were attacked Sunday, immediately shutting down a pumping station in the town of Zubair and forcing officials to use reserves from storage tanks, said former Oil Minister Ibrahim Bahr Uloum.

Bahr Uloum said he believed the southern refineries were stopped and likely to suspend their exports for at least a week to repair the pipelines after attacks. "We are losing a fortune because of this sabotage," he said.

In other developments, one U.S. solider was killed and two were injured late Sunday after a homemade bomb stuck a convoy near the northern city of Mosul, the U.S. military said in a statement.

Special correspondent Omar Fekeiki contributed to this report.

Cleric Moqtada Sadr agreed to a peace deal Friday after three weeks of fighting U.S. forces in Najaf.