Moqtada al-Sadr has agreed to end the uprising in Najaf and leave the shrine from which his militia has fought US forces for nearly two weeks.
One of his spokesmen, Sheikh Mahmoud al-Sudani, said 'Sayyed Moqtada has agreed to the demands.'
The other demands, conveyed yesterday by delegates meeting in Baghdad, were for him to disarm his Mehdi Army and join the country's political process.
A letter from Mr Sadr's office in Baghdad was earlier read out at the conference, saying he agreed to the demands which included leaving the Imam Ali Mosque.
There has been sporadic fighting in Najaf today. A spokesman said US shelling had damaged the mosque and he could see many bodies lying in its courtyard.
Gunfire and explosions were heard in the old city close to the shrine.
The director of Najaf's main hospital said that 29 people had been brought in killed or wounded from the clashes, but there were no precise details.
The violence came as Iraq's interim Defence Minister, Hazem
al-Shaalan, gave the militiamen hours to surrender, saying that Iraqi troops were preparing for a major assault.
The US Defence Secretary, Donald Rumsfeld, earlier said that US troops were unlikely to storm holy sites in Najaf. He said Iraqi troops should deal with insurgents in sacred sites because they have a better understanding of religious sensitivities.
Iraqi leaders choose assembly
Iraqi political and religious leaders have chosen an interim national assembly today, choosing a list of candidates backed by the government.
The selection of the assembly, which will oversee the government and pave the way for elections in January, marks the end of four days of often heated debate among 1,300 delegates.
Mortar bomb attack
This morning, a mortar bomb fired by insurgents struck the building of a roof next to the foreign ministry in Baghdad, which is located close to where the conference is taking place.
There were no casualties in the attack.
