WAR: Al-Sadr Agrees to Weapons Hand Over

Al Sadr deal
Al-Sadr's movement is still pressing for guarantees that the government will stop pursuing its militia members, release the cleric's detained followers and compensate residents for losses suffered during the fighting. But Smeisem said the movement is willing to wait for an agreement on those points.

Iraqi peace deal canceled (Aug 31 2004)
The agreement on Sadr City, reached after several days of negotiations, had come on the heels of the withdrawal of al-Sadr's forces from the city of Najaf last week after the intervention of Grand Ayatollah Ali al-Sistani, the country's most powerful religious leader.

Mahdi Army commanders and other Iraqi sources said Tuesday that Allawi backed out of the agreement Tuesday morning. Simultaneous news conferences scheduled by Allawi and the Mahdi Army to announce their earlier deal were called off.

wikipedia
August 2004 hostilities

After the 4 June truce with the occupation forces, al-Sadr took steps to disband the Madhi army. In a statement, he called on militia members from outside Najaf to "do their duty" and go home. US forces in Najaf were then replaced by Iraqi police. Al-Sadr told supporters not to attack Iraqi security forces and set himself up to become a political force, announcing his intention to form a party and contest the 2005 elections. He said the interim government was an opportunity to build a unified Iraq. Interim President Ghazi Yawer gave assurances that al-Sadr could join the political process provided he abandoned his militia. Iraqi officials also assured al-Sadr that he was not to face arrest.

Despite the promises of the Iraqi government, in late July Sadr announced his intention to boycott the upcoming national conference, as did the Association of Muslim Scholars, a Sunni organization linked to Sadr. Although Sadr initially promised to support the conference, he changed his mind, claiming through a spokesman that it was "a sad joke" and "a trick on the Iraqi people" because of the allegedly undemocratic process for selecting the delegates. On 31 July, Sadr's representative in Karbala, Sheikh Mithal al Hasnawi and his brother were captured by US and Iraqi National Guard troops in a joint raid Sadr representatives condemned the move, reportedly saying "We demand that they be freed, and if this is ignored then we will respond at the appropriate time"

The June settlement was broken after Iraqi policemen and US troops surrounded al-Sadr's home on 3 August, resulting in heavy gunfire, mortar shelling and grenade blasts. The apparent aim was to arrest al-Sadr and destroy his movement. The decision to extend a firefight into extended combat is reported to have been made by U.S. Marines, without the approval of the Pentagon or the Allawi government.