Shia cleric Moqtada al-Sadr has ordered his militia to end attacks on US and Iraqi government forces and will soon unveil plans to pursue his goals through politics rather than conflict.
Iraq's interim government has been pressuring Sadr, whose Mehdi Army militia launched two bloody uprisings in Iraq this year, to renounce violence and to enter the political arena ahead of elections due to be held in January.
"The Mehdi Army is now turning to peaceful struggle. We will have to see in the future - that could change. But now it is peaceful," Sadr aide Sheikh Mahmoud al-Sudani said.
"Moqtada will declare his participation in Iraq's political process. He will not participate directly in elections but he will appoint and back someone from his side or elsewhere."
Sadr's fighters battled US and Iraqi forces in the holy city of Najaf for three weeks this month until the country's most revered Shia leader, Ayatollah Ali al-Sistani, returned from his London hospital bed on Thursday to broker a peace deal.
The deal only covered Najaf and sporadic clashes between Sadr's fighters and US-led forces continued in other Shia areas of Iraq, including the sprawling Sadr City slum neighbourhood in Baghdad.
"Due to the situation in Najaf and the provinces ... we call on all members of the Mehdi Army to cease fire unless in self-defence, and to be patient until the political programme which Sadr's followers are planning is revealed," Sadr aide Sheikh Ali Smeisim told Lebanon's al-Manar television in Najaf.
Sadr's call for an end to violence will ease the pressure on the government of interim Prime Minister Iyad Allawi, which had struggled to contain the uprising until Sistani's intervention.
But Sadr will be a formidable political opponent. His fiery denunciations of Iraq's government and the presence of US-led troops have earned him widespread support among impoverished Shia s impatient with Iraq's Shia clerical establishment.
Shias make up the majority of Iraq's population and were long oppressed by Saddam Hussein, a Sunni. Poorer Shias say their hopes that life would improve after Saddam was toppled have not materialised, and many have flocked to Sadr's banner.
Mr Allawi is also trying to quell a Sunni Muslim insurgency and to bring cities like Falluja, Ramadi and Samarra under control.
Falluja is a particular problem - US forces pulled out in May, turning security over to an Iraqi force after weeks of fighting that killed hundreds and outraged many Iraqis. The city is now largely in the control of insurgents.
Mr Allawi's government is also grappling with a hostage crisis, as insurgents increasingly turn to kidnapping foreigners as a tactic to achieve their aims. Among those being held are two French journalists, whose captors say they will kill them if France does not drop its controversial ban on Muslim headscarves in schools by this evening.
France rejected the demand and despatched Foreign Minister Michel Barnier to the Middle East to try to win their release through rallying support in Iraq and the region.
The crisis stunned France which waged a high-profile campaign to oppose the US-led war in Iraq and because of this considered itself safe from militant attack. France also opposed the 1990-2003 economic sanctions on Iraq.
The two disappeared on August 20th on their way from Baghdad to Najaf. The group holding them has already killed another captive, Italian journalist Enzo Baldoni, after Rome refused to pull its troops out of Iraq.