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DIWANIYAH - Hard-pressed Iraqi government forces were forced to strike a truce with Shiite militia fighters on Tuesday, as fierce fighting followed by a pipeline explosion left 155 people dead.

Officials said that 81 people died in Diwaniyah in Monday`s clashes between security forces and militiamen and that on Tuesday, a few hours after a peace deal was reached, a fire on a fuel pipeline outside town killed 74 more.

Hamid Jaathi, the head of Diwaniyah`s health department, said that another 94 people were injured in the blast, which a defence official said was caused by looters sabotaging a disused fuel pipe to hunt for petrol.

Meanwhile -- as Iraq reeled from a three-day bout of bloodshed -- sectarian attacks left least 10 people dead.

Since Saturday, when Prime Minister Nuri al-Maliki hosted a peace conference for tribal leaders, Iraq has been battered by firefights, murders and bombings, in one of the most violent periods of recent months.

Scores of Iraqi troops and civilians have been killed along with 12 US soldiers, and government forces had to battle to retain control of the mainly Shiite city of Diwaniyah, 180 kilometres (112 miles) south of the capital.

"We reached a settlement with Mahdi Army forces to end the confrontation," town councillor Sheikh Ghanim Abid said, as shops in Diwaniyah reopened and water and electricity supplies were turned back on.

"We killed 50 gunmen in the clashes and this incident resulted in the deaths of 23 of our soldiers and injuries to 30 of them," Maliki said.

Jaathi said eight civilians were also killed in Monday`s 12-hour gunbattle, and that 61 wounded bystanders had been treated.

The army has agreed not to enter residential areas for three days, while the Mahdi Army will withdraw its fighters and a militia commander who was arrested at the weekend will be brought to court within 24 hours, Abid said.

"We are now watching the militia withdrawing. They started pulling out early this morning and they`re still going," an Iraqi army captain told AFP.

The Mahdi Army is nominally loyal to radical Shiite cleric Moqtada al-Sadr, whose party has ministers in the government and a large parliamentary bloc, but aides said the battle had been triggered by rogue elements.

Saheb Al-Ameri, the head of Sadr`s office in Najaf, said Diwaniyah`s governor met the firebrand cleric on Monday to negotiate an end to the battle, which he blamed on the "personal behaviour" of some Mahdi Army members.

During Monday`s fighting, an American F-16 jet dropped a 500-pound (220-kilo) satellite-guided bomb on an "enemy position" while flying in support of Iraqi and coalition troops, the US air force said.

As a tentative peace returned to Diwaniyah, officials reported the deadly explosion at a fuel pipeline just outside the town.

A defence ministry official said the pipeline had not been used since 2003 but that it still contained some fuel and local residents often cut holes in it to siphon off petrol, which is currently in short supply.

"Today they did the same thing and the explosion was set off," he said.

Meanwhile, suspected Sunni Muslim insurgents killed two Shiite militiamen in an attack on the Mahdi Army office in Baquba, north of Baghdad, police said.

Police also said more than 30 Shiite families fled the village of Khan Bani Saad, southwest of the town, after their homes came under mortar attack from suspected Sunni fighters.

Baquba is the violent capital of a region just north of Baghdad in the grip of a dirty war between Sunni and Shiite gangs. Eight more civilians were gunned down in the area on Tuesday, and two blindfolded corpses were also found.

Farther north, in the oil hub of Kirkuk, one policeman was killed when his patrol car was blasted by a roadside bomb, a police colonel said. Three policemen and two bystanders were wounded.

The battle in Diwaniyah underlined the growing confidence of Iraq`s Shiite militias, some of which have been accused of involvement in sectarian killings of members of the Sunni Arab minority.

Maliki`s government has so far been unable or unwilling to rein in these armed groups, which are linked to powerful figures in the ruling coalition.

The US military`s losses in Iraq have increased to 2,631, according to an AFP count based on Pentagon figures, with the military reporting the deaths of 12 soldiers in the past three days alone.

08/29/2006 16:10 GMT

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