Confusion over who is in control of the Imam Ali mosque in Najaf continues despite reports that militiamen supporting Moqtada al-Sadr had handed the keys of the mosque to representatives of Grand Ayatollah Ali al-Sistani.
Al-Sayyid Murtadha al-Kashmir, a spokesman for Ayatollah Sistani, told a news agency the keys had been handed over.
Earlier, Iraqi police had denied being in control of the shrine, despite an interior ministry claim that they had entered it and detained several hundred fighters.
At that time, a news agency correspondent said Shi'ite militiamen were still occupying the shrine late this evening, with no Iraqi police in sight.
An official spokesman said the city was now calm, but witnesses said fighting was continuing near the shrine.
Al Jazeera television also quoted a senior Sadr aide as denying police had entered the mosque. Sheikh Ahmad al-Sheibani told the channel the reports that police were inside Imam Ali Mosque were not true. It gave no further details.
The rebels, who this morning were surrounded in the shrine by US troops after a night of shelling from tanks and planes, had vowed to continue their fight.
Earlier, Iraq's interim Prime Minister, Iyad Allawi, pledged there would be no attack on the mosque.
Iraq's health ministry said at least 77 Iraqis were killed and 70 wounded in the overnight bombardment by US troops in Najaf, with another 13 killed in Baghdad.
Mr Allawi said an ‘olive branch’ was still being offered to Mr Sadr and his forces. The insurgents last night defied a demand from Mr Allawi to disband and leave the holy compound.
And in the port city of Basra, insurgents broke into the headquarters of the South Oil company and set it on fire.
US forces also attacked targets in the Sunni Muslim town of Fallujah.
In Baghdad, US forces advanced into the mainly Shi'ite suburb of Sadr City, calling on insurgents to disarm.
