Najaf's new governor sought Tuesday to assert his authority, demanding that radical Shiite cleric Moqtada Sadr disband his militia and hundreds of protesters called for them to leave the city, as US forces killed 13 fighters in nearby Kufa.
Adnan al-Zorfi warned tribal leaders gathered in his office at the provincial government building that "time was running out" asking them to provide thousands of men for a beefed up paramilitary force that would be in charge of securing Najaf.
He also told them that they, along with Najaf's Shiite religious authority and political parties, "must exert pressure on Sadr to disband his militia".
In return, Zorfi responded positively to a proposal by one of the elders, saying court proceedings against Sadr over the murder of a rival cleric last year could be delayed until after the June 30 handover of power to an interim Iraqi government.
He also promised more funds to rebuild the province and to create jobs.
"My hope is that the Americans won't go into Najaf further than they have already," Zorfi said. "From my meetings with (US overseer) Paul Bremer and other coalition officials, I felt that they were positively predisposed to solve the matter (Sadr's case) peacefully.
"There is room to solve the case of Sayyed Moqtada on condition that the militia be disbanded," he added.
Zorfi said "this demand was not negotiable" and that he has no influence over US military plans to squeeze Sadr and his militia further.
He asked elders to spread the word among Najaf's other main tribes that he wanted them all "to vouch for about 4,000 good men" that would be added to the local Iraqi Civil Defense Corps paramilitary unit to protect Najaf.
Zorfi said the men "would be well-trained" and that this would be in coordination with US military commanders stationed at a base in the city.
As Zorfi laid out his vision and strategy for restoring order in Najaf and getting Sadr's Medhi Army out of it, hundreds of demonstrators took to the streets in the inner sanctum of the holy city demanding that the militia leave.
Men and women marched towards the Imam Ali mausoleum chanting slogans such as "leave Najaf to the residents of Najaf," and holding posters of Najaf-based Grand Ayatollah Ali al-Sistani, the most prominent Shiite religious authority.
An AFP correspondent said protestors, who initially ignored orders to disperse, fled from the scene and shopkeepers rolled down their shutters after militiamen fired into the air.
One militia leader, Abu Hussein al-Hamadani, denied that his men fired, saying that it had been residents around the shrine and that it was a "plot by the Americans to start a war among Iraq's Shiites."
Other militiamen stationed on a hill 100 meters (yards) south of the shrine said they saw four armoured US Humvees approaching from the Bahr al-Najaf area, where a 2,500 troop contingent is camped, at around the time of the demonstration at 11:30 am (0730 GMT).
They said the vehicles came as close as one kilometer (half a mile) from the shrine as US planes flew overhead.
US troops clashed overnight with militia in nearby Kufa killing 13 militiamen and wounding 14, according to a senior coalition military official.
The march in Najaf followed calls since Friday by senior Shiite religious leaders for the Mehdi Army to leave the city after continued clashes with coalition forces and a major downturn in the city's economy.
Mehdi Army forces have been bunkered down near the Imam Ali mosque in the centre of the city where the United States claims they have stockpiled weapons and clash almost daily with US forces in the area.
Sadr has vowed to lead his followers to martyrdom.
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