Hoping to end weeks of fighting in Najaf (search), Iraq's top Shiite cleric unexpectedly returned home from Britain on Wednesday armed with a new peace initiative and a call for Iraqis across the country to march on the holy city to demand an end to the fighting.

Grand Ayatollah Ali Husseini Al-Sistani (search), who wields enormous influence among Shiite Iraqis, had previously declined to get involved in resolving the violent conflicts roiling the nation, and it was unclear why he suddenly changed his mind. But his dramatic return from a nearly three-week trip to London, where he had gone for medical treatment, spread optimism that the crisis could be resolved peacefully.

Despite al-Sistani's call for peace, heavy fighting persisted in Najaf's Old City, the center of many of the clashes between militants loyal to radical cleric Muqtada al-Sadr (search) and a combined Iraqi-U.S. force. Late Wednesday, U.S. warplanes bombed the area for the fourth night in a row and fierce skirmishes broke out. Huge blasts sporadically shook the city, and smoke rose into the night sky.

Early Thursday, witnesses said they saw al-Sistani leave the southern city of Basra, where he had spent the night after arriving in Iraq, for Najaf in a 30-vehicle convoy of sport utility vehicles.

In nearby Kufa, unidentified gunmen shooting from an Iraqi Guard base killed two people and wounded five others who were taking part in what appeared to be a peaceful demonstration supporting al-Sadr, according to television footage and hospital officials.

Soon afterward, three mortar rounds, apparently targeting a police checkpoint, hit a civilian area in Kufa, killing two civilians, including an 8-year-old boy, and wounding four others, witnesses and hospital officials said.

A militant group said Wednesday it had kidnapped the brother-in-law of Iraqi Defense Minister Hazem Shaalan and demanded he end all military operations here, according to a video obtained by Al-Jazeera television.

The militants, calling themselves the "Divine Wrath Brigades," claimed to have kidnapped Maj. Gen. Salah Hassan Lami, Shaalan's brother-in-law and the director of military affairs at the Defense Ministry, according to Al-Jazeera. A second man was also kidnapped, though his identity was unclear. It was not immediately possible to verify the authenticity of the videotape.

The violence over the past three weeks here has killed scores of civilians, destroyed shops and homes in Najaf's Old City and caused slight damage to the revered Imam Ali shrine, where al-Sadr's followers have taken refuge.

Al-Sistani, 75, the nation's most respected Shiite cleric, left for London on Aug. 6, one day after the clashes erupted. He underwent an angioplasty to unblock a coronary artery Aug. 13 and was recuperating, when his office suddenly announced Wednesday morning he was returning to the country "to stop the bloodshed."

Al-Sistani crossed into southern Iraq from Kuwait about midday in a caravan of sport utility vehicles accompanied by Iraqi police and national guardsmen. The convoy stopped in the southern city of Basra (search), where the cleric spent the night before heading to Najaf.

Al-Sistani met with a delegation of government ministers and mediators and told them military operations in Najaf must end and the government must not raid the Imam Ali shrine, according to an Associated Press reporter inside the meeting.

"I hope that peace prevails in Iraq. I hope that peace prevails in Najaf," he said.

Late Wednesday, al-Sistani proposed a new peace initiative, calling for Najaf and Kufa to be declared weapons-free cities, for all foreign forces to withdraw from Najaf and leave security to the police and for the Iraqi government to compensate those harmed by the fighting here, according the al-Sistani aide Hamed al-Khafaf.

Iraqi police sealed off Najaf's Old City, preventing cars from entering, and the police chief, Maj. Gen. Ghalib al-Jazaari, said al-Sadr's Mahdi Army militia was on its last legs.

"The Mahdi Army is finished," he said. "Its hours are numbered."

Witnesses in the Old City said the militants were still fighting in the streets, though the relentless American attacks appeared to be taking their toll.

Police also arrested several al-Sadr aides with valuables from the shrine in their possession, al-Jazaari said. One of al-Sadr's top lieutenants, Sheik Ali Smeisim, was among those arrested, police officials said on condition of anonymity.

In an effort to show support for peace, al-Sistani "will lead thousands of followers on a march to holy Najaf," Hamed al-Khafaf, an al-Sistani aide, told the Arab satellite television station Al-Arabiya. "We call upon all devout Iraqis who follow him" to prepare to head to Najaf.

Basra Gov. Hassan al-Rashid told reporters the peace march will take place Thursday. "The masses will gather at the outskirts of Najaf and they will not enter the city until all armed men, except the Iraqi policemen, withdraw from the city," he said.

Al-Sadr aides issued their own call for a march on Najaf.

Appeals issued from mosque loudspeakers across Iraq urging Iraqis to heed al-Sistani's call. In the Baghdad neighborhood of Sadr City, many left for Najaf in cars and buses. Witnesses in other cities reported similar delegations leaving.

Al-Jazaari cautioned Iraqis not to come here because "they could be putting their lives in danger."

Hours later, hundreds of demonstrators carrying placards of al-Sistani and al-Sadr and chanting al-Sadr slogans headed from Kufa toward Najaf.

Associated Press Television News footage showed apparently unarmed marchers suddenly hit by gunfire from a nearby Iraqi National Guard base. It was unclear who was shooting.

Two marchers were killed and five wounded, said Mohammed Abdul Kadhim, an employee at Kufa's Furat al-Awsat Hospital.

Police in Najaf also raided a hotel where journalists were staying — yelling at them, shooting in the air and accusing them of distorting the truth. They briefly detained about 20 of them, witnesses said.

Al-Jazaari told the detained journalists he did not order the arrests, but had just wanted to talk with them about their coverage of the conflict.

In separate violence west of Baghdad, U.S. warplanes and tanks attacked the volatile city of Fallujah for more than two hours Wednesday, killing at least four people, hospital officials and residents said. Hours later, witnesses heard sporadic fighting in northern and eastern Fallujah.

A Marine spokesman, Lt. Col. Thomas V. Johnson, said tanks and aircraft were targeting insurgent firing positions there.

Fighting in Sadr City also killed one Iraqi and wounded another, according to the Health Ministry.

Also Wednesday, one U.S. soldier was killed when a truck overturned on a bridge near Tikrit, 80 miles north of Baghdad, said Maj. Neal O'Brien, a military spokesman. As of Tuesday, 962 U.S. service members have died since the beginning of military operations in Iraq in March 2003, according to the U.S. Defense Department.

Meanwhile, two Turkish companies on Wednesday began withdrawing their staff from Iraq only hours after the broadcast of a video in which militants threatened to behead two Turkish hostages, the Anatolia news agency reported. The militants had demanded that the companies withdraw from Iraq within three days.

In Beirut, Lebanese Foreign Ministry officials said Wednesday that Lebanese hostage Mohammed Raad, who was kidnapped on Aug. 2, had been freed by his Iraqi captors and was in the Lebanese Embassy in Baghdad.