BAGHDAD, April 11: Iraqi Governing Council members have proposed to the United States that it consider a deal to end a Shia Muslim revolt by agreeing not to arrest Moqtada al-Sadr, Council members said on Sunday.

They said Iraq's US governor Paul Bremer had seemed receptive to the proposal, under which Iraqis would be left to to decide whether to arrest Sadr. An Iraqi judge has issued an arrest warrant for Sadr in connection with the murder of another Shia leader in the city of Najaf last year.

An official in the US-led administration ruling Iraq said the coalition was open to suggestions on how to solve the crisis but the US public objective of arresting Sadr and defeating the rebels was unchanged.

"Moqtada al-Sadr is free to turn himself in peacefully if he wishes. Further measures would have to be taken against him if he does not," said the official, speaking on condition of anonymity.

US military officials say they will destroy Sadr's militia. US soldiers have retaken the eastern town of Kut which had been seized by Sadr's militiamen. Sadr says he was not involved in the murder of Sayyed Abdel Majid al-Khoei, the son of the late Grand Ayatollah Abu al-Qassem al-Khoei in Najaf a year ago.

The murder at Iraq's holiest Shia site sparked fears of violent divisions among the country's Shia leadership. An arrest warrant was issued for Sadr months ago, US officials say, but was only announced after his followers clashed with US-led occupation forces in the past week.

SOFTER STANCE: Adnan Ali, a spokesman for the Shia Dawa Party, which is represented on the Iraqi Governing Council, said US officials had privately softened their stance on arresting Sadr and a deal was expected in the next few days.