The offices of both men confirmed Saturday's meeting in the holy city of Najaf, where sporadic clashes this week interrupted a truce between al-Sadr's followers and US occupation troops.

No details were revealed on the encounter. Al-Sistani, an Iranian-born cleric, is seen as wielding wider influence over Iraqi Shia than al-Sadr, whose main support base is among those living in the poor suburbs of Baghdad.  

The meeting came a day after al-Sadr's fighters, the al-Mahdi Army, and occupation troops agreed to withdraw from Najaf and neighbouring Kufa as part of a deal aimed at ending a two-month standoff. The fighting has spread to cities and towns in southern Iraq, leaving hundreds of civilians and fighters dead.

Iraqi police were seen patrolling the streets of Najaf on Saturday for the first time in weeks. But a US military official denied there was any truce with al-Sadr and claimed they had defeated the Shia leader.

There was relative calm in the
streets of Najaf on Saturday

"The Muqtada militia is militarily defeated. We have killed scores of them over the last few weeks, and that is in Najaf alone," said Brigadier General Mark Hertling, one of the top US commanders in charge of Najaf. He also declared victory in Kut, Diwaniya and Karbala, where al-Sadr's fighters have fought fierce battles against the occupation.
 
Al-Sadr unleashed a deadly uprising against the occupation in April after soldiers opened fire on demonstrators protesting the closure of a pro al-Sadr newspaper and the detention of an aide.

Arrest warrant

US occupation authorities have also issued a warrant for his arrest for his alleged role in the murder of a cleric last year, a charge al-Sadr denies. 

But Iraq's interim Prime Minister Iyad Allawi said on Saturday his government would deal with al-Sadr through judicial channels, overlooking US demands to capture or kill him.

"The armed presence (of al-Sadr's al-Mahdi Army) in Najaf and Kufa has ended. As to brother Muqtada al-Sadr, he will talk to judicial authorities through the committees that have been formed and are overseen by the national security adviser," Allawi told Aljazeera.

This will be aimed at "discussing the issue of (charges) levelled at him," Allawi said when asked about US demands to capture or kill him.