NAJAF, Iraq, Aug. 12 - Faced with a populist Shiite cleric who has bunkered a heavily-armed militia force in the sect's holiest shrine, American commanders in this city of 500,000 resorted reluctantly on Thursday to a scaled-down objective, throwing a wide cordon of troops and armor around the city's heart and announcing that they planned to "further isolate" the militiamen.
Only days after the new Iraqi prime minister, Ayad Allawi, flew into Najaf on an American military helicopter and announced that there would be "no negotiations or truce," he and the American officials in Baghdad who are his indispensable partners in power appear, for now, to have backed away from a showdown. Instead, they are pursuing a combination of negotiations and a tightening blockade around the mosque.
Raising the morale of the militiamen, loyalists of the cleric, Moktada al-Sadr, have spread their insurrection across central and southern Iraq, the country's Shiite heartland.
[Reuters reported Friday that Mr. Sadr was wounded in the American bombardment of Najaf, but his exact condition remained unknown. Mr. Sadr "was wounded in American bombing," Ahmad al-Shinabi, a spokesman for the cleric, said. "He suffered three injuries to his body. We don't know his exact condition or to where he was taken.'' Another spokesman confirmed the report, but there was no independent confirmation.]
His militiamen have attacked in Sadr City, the Baghdad slum, as well as in Diwaniya, Kut, Al-Hayy, Nasiriya, Amara and Basra, towns that are among the largest Shiite population centers, each of them a way station for American and British troops in the invasion 16 months ago that toppled Saddam Hussein.
The fiercest fighting, apart from Najaf, appeared to have been in Kut, a city about 150 miles south of Baghdad that was briefly taken over by Mr. Sadr's fighters in the spring.
According to Qassim al-Mayahi, the head of al-Zahra hospital, 84 people were killed and more than 170 wounded, many of them civilians, in fighting that began with rebel attacks on government buildings on Wednesday. A police commander said the attacks subsided only after American warplanes staged a two-hour bombing raid before dawn on Thursday of a district where Mr. Sadr had a militia base. At a news conference on Thursday evening, the Iraqi interior minister, Falah Naqib, painted a grim picture of the situation created by the Sadr forces, calling it "a war." Dismissing Mr. Sadr's claim to be the leader of a national resistance movement, he said: "This doesn't fall into the category of national resistance. It is an assault on the Iraqi people."
Qassim Daoud, a minister of state in Dr. Allawi's cabinet, said there could be only one response. "The only solution is the rule of law," and bringing an end to attempts by Mr. Sadr to seize power, he said. "These people are trying to deprive the Iraqi people of their rights," he added.
The situation in Najaf was redolent of events in April , when American commanders, confronted then as now by an uprising stirred by Mr. Sadr, built up a powerful strike force around Najaf with a vow to uproot the cleric and his fighters from the Imam Ali mosque, then decided that the political costs of attacking or damaging the shrine compelled an accommodation.
Then, Mr. Sadr won agreement to an "exclusion zone" in Najaf's center that left him free to build his militia and advance himself as the authentic leader of Shiite resistance to American military occupation.
This time, senior American officials in Baghdad said, the aim will be to constrict the fighters much more tightly, moving in from the initial cordon, set about a mile from the mosque at the closest point on Thursday, to a blockade line closer in, with Iraqi police and national guardsmen moving farther forward.
The officials said the aim would be to halt the flow of men, weapons and ammunition, as well as food and other supplies, into the area around the mosque, and to prevent any fighters from leaving until they have surrendered their weapons.
Simultaneously, the American force of about 3,000 Army and Marine troops, appeared to have orders to pursue and kill any militiamen outside the old city.
At nightfall on Thursday, American troops outside the cordon stormed a cluster of buildings that formed one of the Sadr strongholds. Backed by American warplanes that pounded the area and unleashed a huge plume of black smoke, a Marine strike force battled through to a house used by Mr. Sadr, which the Americans said had been abandoned before the attack, and to a school and hospital taken by the militiamen.
About 50 rebels were inside, said Maj. David Holahan, second-in-command of the Marine unit involved, and nearly all were killed.
"The city's going to get cleared out," he said, voicing the spirit of the military units preparing for a full-scale assault on the inner city.
It remained unclear what Dr. Allawi's government and the Americans might be willing to negotiate - and what might be offered by Mr. Sadr, who has retreated into hiding since a news conference in the shrine earlier in the week in which he vowed to "fight to the last drop of my blood."
A representative of Mr. Sadr's in Baghdad, Sheik Mahmoud al-Sudani, said Thursday that "when the threat to the holy shrine is ended, the Mahdi Army will dissolve." Mr. Sadr made similar pledges in the spring.
In a statement issued in Baghdad, Dr. Allawi, whose vows to crush the insurgents are a hallmark of his first weeks in office, made it clear that concerns about Shiite reaction to an assault on the mosque had given him pause. "I would like to relay to the noble people of Iraq that the holy shrine will remain safe from all attacks that could possibly harm its sacredness," he said.
The goal now, he said, would be to get the rebels in the shrine to surrender their weapons and leave, taking advantage of a 30-day amnesty for rebels announced last weekend.
One aide said that Dr. Allawi, himself a Shiite, had been influenced by a growing number of calls for restraint from other leading Shiites in the new political establishment in Baghdad. As well, they said, he had taken note of a statement issued from a London hospital on behalf of Ayatollah Ali al-Sistani, the most revered of Iraq's Shiite religious leaders, who left the country just before the uprising reignited. Aides have said that Ayatollah Sistani, who is 73, is suffering from a heart condition.
Throughout Mr. Sadr's insurrections, dating to March, Ayatollah Sistani has remained noncommittal, a stance many Iraqis say reflects both his contempt for Mr. Sadr as a religious upstart and an acknowledgment that he has a widespread following that may have to be factored in to any future political arrangements.
The ayatollah said Najaf and other Shiite cities were "experiencing tragic circumstances now, in which sanctities are violated, blood is shed, and properties destroyed, with no deterrence." He went on to call for a negotiated solution. "His eminence calls on all factions to work seriously to end this crisis soon, and lay principles to ensure that it does not occur again," the statement said.
By late Thursday, negotiations were reported to have begun in Najaf between representatives of Mr. Sadr and a personal emissary of Ayatollah Sistani's, Hussein Shahristani, a nuclear physicist. Also in the city, and joining Mr. Shahristani in the negotiation effort, officials in Baghdad said, was Muwaffak al-Rubaie, national security adviser to Dr. Allawi.
Mr. Sadr, a shrewd tactician, may feel that he is negotiating from a position of strength. Western reporters who found a way through the American cordon on Thursday and reached the mosque said there were hundreds of militiamen in the surrounding streets and alleyways, with many fighters ensconced in the mosque itself, perhaps as many as 1,000 in all.
One reporter, speaking by telephone, said the fighters appeared to have plentiful food, water and ammunition, and to be in relatively good spirits, despite eight days of often heavy fighting in the vast cemetery adjoining the shrine and frequent air attacks. "They're sitting in their foxholes, their basements and their hotels, with their rocket-propelled grenades, their mortars and their Kalashnikovs, just waiting for the Americans to come," said the reporter, who asked not be identified. "They're a little nervous, of course, but they don't seem to be exhausted. Much of the time, when they're not praying, they're laughing."
The reporter saw many of the men, armed, inside the mosque - confirmation, seemingly, of claims by Dr. Allawi's government, and American commanders, that it has become a fortified base. But he said that, after 12 hours inside the mosque, moving around its vast courtyard and areas leading from it, he had seen no sign of major weapons stockpiles, though there might have been some in parts of the 1,000-year-old complex that he was not in.
"There are a lot Kalashnikovs leaning against the wall," he said. "And there doesn't seem to be any shortage of ammunition."
The ease with which reporters reached the mosque, using side roads and alleys to skirt American tanks, suggested that closing access to the shrine for militiamen may not be easy. But the impact on the residents of the Old City seemed likely to be severe. Many were seen fleeing the area on Thursday, responding to Humvees that had toured the city earlier urging people to leave areas where fighting was likely. One American unit turned back a man leading a donkey loaded with food toward the Old City, saying the supplies could be heading for the rebels.
Sadr City was mostly quiet on Thursday, with American tanks guarding all main access roads into the capital, and closing highway overpasses and bridges. But the sense of crisis that has kept parts of the city effectively shut down for days was heightened by American helicopters and combat jets that patrolled ceaselessly above.
Alex Berenson reported from Najaf, Iraq, for this article and John F. Burns from Baghdad.