Radical cleric Muqtada al-Sadr announced today that he will order his Shia Mahdi Army to continue its ceasefire by another six months.
The peace deal had been due to expire at the weekend, and some earlier reports indicated that it might not be renewed.
Supporters of Shia cleric Moqtada al-Sadr carry his picture during a rally in the Sadr city neighbourhood of Baghdad yesterday
Al-Sadr's decision to halt the activities of his powerful militia last August was one of three critical steps that have been widely credited with bringing the Iraqi death toll down more than 60 per cent in recent months.
The US military welcomed initial word of the decision but pledged to continue cracking down on what it calls breakaway factions that persist in violence.
The US military has continued to raid Shia groups it says are supported and trained by Iran and have splintered from al-Sadr's militia.
That has angered some followers of al-Sadr, who also are frustrated with the Iraqi government, and they argued for an end to the ceasefire. At least 609 Iraqi civilians and security forces died in Iraq last month, compared to 1,920 killed in January 2007.
Al-Sadr's original surprise decision to stand down his Mahdi Army for up to six months was designed to stop a Sunni-Shiite rift from spiralling out of control, and to weed out infiltrators in his militia's ranks, according to aides of the radical cleric.
Al-Sadr issued his order to his fighters to stand down on August 29th.
AP