Baghdad, Iraq ? Rebellious Shiite Muslim cleric Muqtada al-Sadr agreed Thursday night to withdraw his militia from a contested shrine and other parts of the city of Najaf after three weeks of fighting against U.S. and Iraqi forces, government and religious leaders said. The last-minute deal, brokered by Iraq’s top Shiite leader, Grand Ayatollah Ali Sistani, commits the country’s interim government to significant concessions.

In exchange for al-Sadr’s compliance, the government pledged to pull U.S. military forces out of Najaf and to allow al-Sadr, who had been wanted by the former U.S. occupation authority on murder charges, to participate in politics.

“He is as free as any Iraqi citizen to do whatever he would like in Iraq,” said Qasim Dawood, a minister of state, after announcing the government’s acceptance of the peace plan.

The accord was reached on a day when more than 45 people died in a mortar attack and other violence in Najaf and the neighboring town of Kufa, which are about 90 miles south of Baghdad.

Members of al-Sadr’s Mahdi Army, a well-armed militia that numbers in the low thousands, will be allowed to leave Najaf and return to their homes without any sanction, despite having fought against U.S. and Iraqi security forces for three weeks. The agreement, crafted by Sistani, calls for thousands of Shiite pilgrims to be permitted into the closed-off city in the early hours of Friday morning to visit the shrine of Imam Ali, providing an opportunity for militiamen holed up there to melt into the throng and avoid detection as they depart.

Al-Sadr, who has reneged on peace deals in the past, did not issue a statement of acceptance, but senior government officials and a top aide to Sistani expressed optimism that al-Sadr would comply with the terms of this agreement, which was reached during a meeting between Sistani and al-Sadr. “Mr. Muqtada Sadr has agreed to the proposals from his eminence, Ayatollah Ali Sistani,” said Sistani’s top aide, Hamed Khafaf.

‘No more fights’

If al-Sadr’s militiamen leave the shrine, it would end a conflict that has claimed hundreds of lives and roiled Iraq’s Shiite majority, who have been concerned that using force to resolve the standoff could damage the gold-domed edifice. “Iraq has achieved a victory today,” Dawood said at a late-night news conference. “No more fights. Najaf and Kufa will be peaceful cities, free from arms, free from militias.”

The U.S. military, which ceased offensive operations on Thursday because of the peace talks, did not withdraw from positions inside Najaf after the deal was announced. Daoud said U.S. forces will be instructed to “draw back” by the interim prime minister, Ayad Allawi, once al-Sadr’s militia leaves the city.

Sistani triumphs

The arrangement was a vivid indication of the enormous clout Sistani wields among Iraq’s Shiites. His objections to American plans for Iraq’s political transition forced the U.S. occupation authority to make substantial changes on two occasions. But in recent months, some political and religious leaders questioned whether Sistani, a reclusive 73-year-old who believes in the separation of religion and government, was losing followers to al-Sadr, a mercurial man in his early 30s who lacks Sistani’s clerical credentials but plays a more activist form of street politics.

Last week, Sistani’s aides demanded that al-Sadr hand over the keys to the shrine, but al-Sadr’s aides refused, insisting that a transfer had to be done on their terms. The exchange seemed to suggest that Sistani lacked the power to rein in al-Sadr.

But Thursday’s compromise indicated Sistani is still the most influential cleric in Iraq, a man who can force both Sadr and the interim government to yield to his middle-ground approach. When Sistani arrived in the southern port city of Basra on Wednesday after a trip to Britain for treatment of a heart condition, Dawood and another Cabinet minister flew to meet him and discuss his peace plan. Shortly after Sistani’s police-escorted convoy reached Najaf Thursday afternoon, al-Sadr came calling.

“Sayyid Ali Sistani has played a very important role in bringing about peace,” said Dawood, using the honorific reserved for descendants of the prophet Mohammed.

‘Most of them get away’

The deal also revealed the limits of the power of Iraq’s interim government. Allawi and other senior officials had sought to avoid any resolution that would allow al-Sadr’s militia to reconstitute itself, favoring the use of force to kill or capture as many militiamen as possible. But because the government could not rely on its own security forces to deal with the threat alone, it was forced to seek assistance from the U.S. military. That put the government in an untenable position: If U.S. forces stormed the shrine, Shiites would be outraged, but if they didn’t, al-Sadr’s men could drag out the confrontation for weeks.

A senior Iraqi official, speaking on condition of anonymity, acknowledged that Sistani’s deal will allow the militiamen to return unchallenged to their homes in Baghdad and other Iraqi cities. “We’re going to let most of them get away,” the official said.

But the official expressed hope that by ending the standoff and allowing al-Sadr’s supporters to participate in politics, the plan would cause the militia to be weakened and eventually demobilized. “If the shrine is clear, it will help us pursue our main objective of dismantling his militia,” the official said.