Police on Friday took reporters to a room that had been used as a courthouse, about 200 metres from the Imam Ali shrine, where at least 15 bloated, blackened corpses lay covered in flies.
"We entered the building which was being used as Muqtada al-Sadr's court and we discovered in the basement a large number of bodies of police and ordinary civilians," said the deputy head of the Najaf police, General Amr Hamza al-Daami.
"Some were executed, others were mutilated and others were burned."
But the Islamic court's chief administrator, Hashim Abu Rif, denied the police accusations.
"We denounce this charge. This government is very capable of trying to frame us. Those corpses are our fighters which we could not wash or move because the Iraqi government and Americans cut off the electricity and water," he said.
"Where is Iraq's
minister of justice to try the interim government for violations of
Shaikh Yusuf al-Nasri, al-Sadr's
public relations chief in Baghdad
"There is also one woman who was passing by the shrine and killed by a sniper. We can identify each and every body."
A pungent odour of death hung over the courtyard where the bodies lay, their clothes soiled and muddy, an AFP correspondent said.
One witness, Rahri Husayn, said he was close to the Imam Ali mosque when "a young man asked everyone to come to the court building because he said he was tortured there and he was convinced that there were prisoners still being held in there."
Husayn continued: "When we got down there we found only two people alive, the uncle of the police chief and a boy. The rest were just dead bodies."
Adil al-Jazairi, the uncle and driver of Najaf police chief Ghalib al-Jazairi, was kidnapped by militiamen on 8 August.
Beer cans littered the ground and a national guardsman said, "Look with your own eyes - they drank beer and then they killed."
In an interview with Aljazeera, Shaikh Yusuf al-Nasri, head of public relations at al-Sadr's Baghdad office, said: "We do not have detailed information about the incident, but three days ago we announced that the US forces had used banned gas bombs which were dropped on fighters in Najaf.
Bloated bodies lie strewn on the
ground among empty beer cans
"The bombs caused the swelling of the faces and made the bodies charred, distended and rotten."
Gas bombs used?
Al-Nasri said when the Iraqi International Committee of the Red Cross ambulances came to evacuate the bodies, they were attacked and all on board the vehicles were killed.
"We think that the US forces had prevented the ambulances so that no one can see the bodies since internationally banned gas bombs were used in the attack."
He also criticised the Iraqi interim government for not condemning this incident.
"I hoped to see the Iraq's minister of human rights commenting on the crisis, saying a word or a statement but unfortunately he did not do anything."
"Where is Iraq's minister of justice to try the interim government for violations of human rights?" al-Nasir said.
Iraqi police and national guardsmen, led by US occupation forces, had been fighting al-Sadr's militia in Najaf and elsewhere for the past three weeks until a peace deal was reached on Thursday night.