Iraq's top Shia cleric is demanding that militants leave the Imam Ali shrine before religious authorities assume control, a crucial step toward ending a two-week-old uprising by Muqtada al-Sadr's Mahdi Army.

Negotiations continued late into the night Friday, after an aide to the Grand Ayatollah Ali al-Sistani said the rebels must depart before clerics would take the keys to the shrine.

The militants removed all their weapons from the shrine earlier Friday after the ayatollah agreed to take over, a breakthrough in the standoff between al-Sadr's fighters and the Iraqi and U.S. troops.

By evening, civilians and unarmed members of al-Sadr's militia were reportedly mingling in the shrine compound, the focus of a bloody battle that has left hundreds dead.

Al-Sadr supporters maintained control of the shrine Friday night while gunfire and explosions continued to be heard.

A total of 77 Iraqis had died on Thursday and Friday alone as U.S. tanks and warplanes pounded Najaf and troops traded fire with al-Sadr's supporters, Iraq's health ministry said. The five-hour U.S. bombardment pummelled sites near the sacred Imam Ali shrine, but did not appear to have harmed the mosque itself.

Ali al-Sistani (AP file photo)
Ali al-Sistani (AP file photo)

Iraqi interim Prime Minister Ayad Allawi told the British Broadcasting Corporation on Friday that Iraqi police would not attack the mosque, despite an ultimatum he issued one day earlier.

He urged al-Sadr to become part of Iraq's political process.

On Thursday, al-Sadr called on Muslims around the world to rise up against the Americans if the shrine was attacked.

The first aerial bomb arrives in Najaf during a U.S. assault. (AP photo)
The first aerial bomb arrives in Najaf during a U.S. assault. (AP photo)

Also in Iraq on Friday:

  • U.S. troops pulled out of the Baghdad slum, Sadr City, where they had clashed with supporters of the rebel cleric on Thursday, leaving 10 dead.
  • Rebels bombed a U.S. military patrol in Samarra, about 100 kilometres north of Baghdad, killing two soldiers and wounding three more, the American military said.
  • Al-Sadr militants blew up an oil pipeline near the southern city of Amarah, Iraqi police said.
  • U.S. warplanes attacked in Fallujah, a hotbed of Sunni Muslim insurgents, killing two and wounding nine people.