"If America promises to handover sovereignty and Iraqis start to get what they need, the Mahdi Army will recognise the legitimate government," main al-Sadr spokesman Shaikh Ahmad Shaibani told AFP on Monday.
"The Mahdi Army will withdraw from the whole field if the Americans keep their promises and allow a democratic government. If we get real promises and real agreements, the issue can be addressed," he added.
On Sunday, the police chief of Najaf, 160km south of Baghdad, said that a three-day ultimatum for the militiamen to abandon their stronghold next to the Imam Ali mausoleum would expire at midnight (20:00 GMT) on Monday.
The police chief also made it clear the Mahdi Army would have to evacuate the shrine and threatened to "slaughter" any militiamen if Shia House, the umbrella group of religious, political and tribal leaders, failed to persuade the fighters to disperse.
Militias to disband
Meanwhile, nine Iraqi militias have agreed to disband under a deal announced on Monday by the interim prime minister, Iyad Allawi, but which does not include the Shia and Sunni groups responsible for the bulk of the latest resistance attacks.
"I am happy to announce today the successful completion of
negotiations on the nationwide transition and reintegration of
militias and other armed forces previously outside of state
control," Allawi said in a statement.
The agreement was reached with nine political parties, most of them participants in the new Iraqi government, and affects an estimated 100,000 militiamen.
If successful, the deal will go a long way to minimising the
risk of civil war in Iraq's brittle mosaic of Sunni and Shia Arabs and Kurds.
Officials of the US-led occupation made clear the agreement, referred to as CPA order 91, leaves al-Sadr's militia and other movements fighting the Americans effectively outside the law.
Muqtada al-Sadr's men have been
battling the occupation for months
Al-Sadr, whose followers have battled the occupation forces for the past two months, faces a three-year ban from political office if he ever scraps his Mahdi Army militia.
Al-Sadr aides dismissed the new order, insisting that the Mahdi Army was a popular movement rather than a militia.
"This agreement does not concern us because we are not a
militia. We are a popular and radical movement and we are not looking for political posts," said aide Husam al-Husayni.
The order makes a distinction for the nine parties which signed up to the agreement, calling them resistance group against former president Saddam Hussein.
Allawi listed the groups: Kurdistan Democratic Party (KDP);
Patriotic Union of Kurdistan (PUK); the Sunni-based Iraqi Islamic Party; the Shia Supreme Assembly for the Islamic Revolution in Iraq (SAIRI) and its Badr Brigade militia; the prime minister's own Iraqi National Accord (INA); Ahmad Chalabi's Iraqi National Congress (INC); the Shia-based Iraqi Hizb Allah; the Iraqi Communist Party, and the Shia Dawa party.
A commander of the former Badr Brigade, general Shahir Faisal al-Shahir, was shot and killed on Monday at a crossroads in the Iraqi capital, a SAIRI spokesman in Tehran said.
Allawi's plan aims to disband 90%
of the militias by January 2005
An occupation official told reporters that Dawa, the INC and INA claim they have already dissolved their militias other than small security forces deployed to protect their leaders.
Those bodyguard teams are to be disbanded and turned into
private security firms that could be hired to guard political
parties or reconstruction projects, the official said.
The law warns of penalties for any political party whose militia
takes up arms again. The sanctions are to be announced in
legislation later this month.
The deal, in the works since February, aims to have 90% of the militias decommissioned by January 2005 and the remainder phased out by next spring, Allawi said.
"This agreement does not concern us because we are not a militia. We are a popular and radical movement and we are not looking for political posts"
But implementation hinges on the formation of an Iraqi government oversight committee to ensure that the groups, including Iraq's main Shia and Kurdish parties, truly disband and hand in all arms.
Allawi said about 40% of the decommissioned forces would become ordinary civilians and another 60% would join "the Iraqi armed forces, the Iraqi police service, or the internal security services of the Kurdish regional government".