An Iraqi delegation plans to meet with U.S. officials Sunday to discuss a five-point proposal for ending the nearly one-month standoff in the holy city of Najaf between American forces and a radical Shiite Muslim (search) cleric.

Representatives of Muqtada al-Sadr (search), whom U.S. commanders have vowed to capture or kill, have already talked with a delegation of tribal leaders about the proposal. It calls for the cleric's militia to leave Najaf, and for al-Sadr not to be jailed on a murder charge until a new government is formed, according to Hakem al-Shibli, a member of the negotiating team.

The mediators — made up of tribesmen and a former judge — received the blessing of the office of Grand Ayatollah Ali al-Husseini al-Sistani (search), Iraq's most senior and influential Shiite cleric, al-Shibli said.

Al-Shibli said he was hopeful a settlement would be reached.

"We agree to all these points," said al-Shibli, head of the National Coalition of Clans and Tribes (search) in Najaf province. "All the conditions are legitimate and rational."

He said Najaf's tribes would reject any American demand to arrest al-Sadr, who is wanted under an Iraqi warrant. "If the Americans insist on it, despite the compromises that Seyed Muqtada has made, it would not be just," al-Shibli said.

However, an al-Sadr senior spokesman who met with the mediators Saturday, Sheik Qais al-Khazali, was less optimistic, saying all other efforts to end the standoff had failed because of Americans. He said that if the Americans rejected a peaceful settlement, al-Sadr's al-Mahdi Army would fight.

"All the political attempts to reach a peaceful settlement have failed. As you know, it is all because of the American side and not us. We prefer negotiations and want to avoid bloodshed," al-Khazali said.

Al-Sadr is accused in the slaying of a rival cleric last year. The U.S. military moved to capture him after his militia staged an uprising across the south, sparked by the arrest of one of his aides. That uprising has died down, but his militiamen still dominate Najaf, Kufa and Karbala, the three holiest Shiite cities in Iraq.

The negotiations over al-Sadr came as the United States reached an agreement aimed at ending the Marine siege of Fallujah, west of Baghdad. Under that deal, Marines would pull back and a new Iraqi force would take over security in the city, a stronghold of Sunni guerrillas.

Najaf's police chief, tribal leaders and the various political and religious groups have been meeting for three days to negotiate a settlement for police to take over security in the streets of Najaf, where al-Sadr's militia has for weeks held sway.

The police chief, Gen. Ali al-Yaser, won a three-day truce between al-Sadr and U.S. forces in and around Najaf to last through Sunday.

The new proposal calls for:

— Withdrawal of coalition forces from the center of Najaf and the nearby city of Kufa.

— No American patrols in Najaf and Kufa.

— A guarantee al-Sadr's militia will refrain from shooting at coalition troops.

— An end to any armed presence in Najaf.

— Legal procedures against al-Sadr left for a new elected government.

Al-Khazali said al-Sadr was also demanding the release of political prisoners.

Late Saturday, officials in another Shiite holy city, Karbala, said local dignitaries had mediated a three-day truce between police and the al-Mahdi Army. The officials said efforts were under way to arrange a truce for around Karbala.

Hundreds of U.S. troops are deployed outside the Najaf-Kufa area, and a contingent has moved into a base within the city, about three miles from sensitive holy sites at the heart of Najaf. The Americans have clashed occasionally with al-Sadr followers outside Najaf.

U.S. commanders say they will stay far away from the Najaf holy shrines to avoid what would likely be a furious backlash from Iraq's Shiite Muslim majority if the sites even appear to be threatened.