Before returning to their homes elsewhere in Iraq, the al-Sadr loyalists gathered for a rousing and jubilant Friday prayer at the Kufa mosque during which they proclaimed their continued support for the Shia leader.
The unarmed fighters chanted outside the mosque that victory had been theirs and they could now return home.
A recent ceasefire deal between al-Sadr supporters and US occupation forces ended weeks of fighting which had left hundreds of Shia fighters dead.
They appeared to have interpreted the deal as having vanquished the US forces which have returned to their garrisons outside the city.
Al-Sadr - who led a two-month uprising in Iraq - denounced interim Iraqi President Ghazi al-Yawir as a US-installed puppet and called on the government to end its alliance with the occupation forces.
The Shia leader told al-Yawir in comments read by an aide during the weekly Friday sermon at the Kufa mosque: "Your alliance with the occupation will bring only shame and disgrace to you."
In a turnaround last week, al-Sadr had said he would support the new government, due to assume power on 1 July, but only if it worked to end the US presence in Iraq.
"Your alliance with
the occupation will
bring only shame and
disgrace to you"
Shia leader Muqtada al-Sadr
Al-Sadr's uprising, launched in April after US occupation authorities closed his newspaper, has left hundreds dead in clashes with US troops.
The Shia leader ordered those members of his Mahdi Army who do not live in the cities of Najaf and Kufa to leave last week - a key part of an agreement to end fighting there with US forces.
Most of al-Sadr's fighters in the two cities are believed to be from the area and not covered by the order.
Although calm has returned to Najaf, Kufa and Karbala, Baghdad's al-Sadr City has become the new battleground for the Shia insurgency.
The poor Shia suburb of the Iraqi capital has seen pitched battles in recent weeks between US forces and al-Sadr loyalists.