Abd al-Karim al-Anzi, an envoy appointed by al-Sadr to lead negotiations aimed at averting bloodshed in the holy city of Najaf, said on Wednesday that a deal could be struck in the next 24 hours.
"I expect a solution within the next 24 hours. I met US officials today and the talks were extremely positive," Anzi said.
There was no immediate comment from the occupation authorities, who have threatened to either kill or capture al-Sadr.
An al-Sadr spokesman in Najaf said earlier in the day the cleric has dropped his conditions for entering into negotiations with the occupation authorities.
"I expect a solution within the next 24 hours. I met US officials today and the talks were extremely positive"
Abd al-Karim al-Anzi
Anzi said al-Sadr had made proposals to avoid clashes between his militias and occupation forces. But he would not be drawn on details.
"He realises that an armed confrontation is not in anybody's interest," he said.
In media interviews, al-Sadr had said he was willing to die in the struggle to end the occupation.
"I am ready to sacrifice myself for the patient, heroically struggling Iraqi people in order to free my country from the misery of the occupation," he said.
But in more conciliatory comments, he added "the doors are open for all well-meaning people who are trying to end this artificially whipped-up crisis."
Al-Sadr's Mehdi Army has launched an uprising across Iraq, which the occupation forces are hard-pressed to suppress.
Iraqi Governing Council member Ahmad Chalabi said the United States knew it had to seek a compromise with al-Sadr, given his strong public support and the sanctity of the city he is in.