Fighters loyal to rebel cleric Moqtada al-Sadr were firmly in control of Najaf's Imam Ali mosque today, defying efforts by Iraq's UA-backed government to end a radical Shi'ite rebellion.
Militiamen brandished weapons around the mosque, the centre of a two week confrontation with US forces that has helped drive oil prices to record highs and has presented the interim government with is biggest crisis yet.
"Bring those Americans here to fight hand to hand," said one militant, biting his finger for emphasis. "They are cowards. They stay thousands of feet away in their airplanes. They are scared, they know we will slaughter them."
Aside from sporadic exchanges of gunfire and a tank firing a few shells, Najaf was relatively calm this morning.
Holding out hope for a peaceful resolution, one of Sadr's top aides said the rebel leader wanted to hand over Iraq's holiest Shi'ite Muslim shrine to Ayatollah Ali al-Sistani, the majority Shi'ite country's most influential cleric, and that talks on the mosque's future had begun.
"We would like to hand over the shrine to the religious establishment which has the right to control it," Sheikh Ahmad al-Sheibani told reporters. "It is only natural that Ayatollah Sistani should accept it."
Medhi army fighter in Najaf
Sistani, a moderate cleric who usually lives in Najaf, is now in Britain recovering from surgery.
But Sadr's aide later added that Sadr's militia would continue to guard the mosque after any handover, precisely the outcome that the two-month-old government has vowed to prevent.
"The Mehdi Army will continue to defend the shrine and Najaf, all of Najaf because it is a holy city," Sheibani said. "The Americans will not be allowed into Najaf."
Sheibani said no time had been set for a handover of the mosque and called on Prime Minister Iyad Allawi's government, which had at one point threatened to storm the mosque, to pursue a peaceful solution to the crisis.
Sheibani said Sadr had agreed to hand over the keys to the shrine to Sistani's aides, but did not say when. Such a handover would be largely symbolic if Sadr's fighters remained in place in and around the mosque, where they have been fighting off efforts by US and Iraqi government forces to dislodge them.
Sadr's uprising has fuelled fears of disruption to Iraqi oil production and has helped push world crude prices to new highs. US light crude hit a new record of $49.40 a barrel yesterday, before slipping back to close just below $48.
Confusion over control of the mosque swirled on Friday as the revolt, in which hundreds have died, entered its third week. The Interior Ministry said police had entered the shrine and arrested hundreds of fighters without firing a shot, a claim quickly denied by Sadr's aides.
A bloodless seizure of the mosque would have been a big political victory for Allawi. Since taking over from US occupiers on June 28th he has struggled to end an insurgency and the Sadr-inspired Shi'ite rebellion in eight cities.
Iraq's Health Ministry said today at least 21 Iraqis had been killed and five wounded in Najaf over the past 24 hours.