NAJAF, June 30: Iraqi police imposed a curfew in the holy city of Najaf from Wednesday after a patrol clashed with fighters loyal to religious leader Moqtada al-Sadr. Najaf police chief Ghaleb Hashem al-Jezairi told reporters that residents should stay in their homes between 9pm (1000pm PST) and 6:30am (0700am PST).

Witnesses said shops were closed and Sadr's Mehdi Army fighters were on the streets in force after the clash with a police patrol that had pursued a criminal into the city.

Prime Minister Iyad Allawi has said the interim government, which formally took over sovereignty from the United States on Monday, might impose emergency law in parts of the country racked by an insurgency.

Pre-empting any nation wide rules, residents in Najaf, 160 kilometres south of Baghdad will be obliged to stay indoors during the specified time, said Brigadier General Ghalib al-Jazaairy.

"We are going to enforce a curfew to restore security in this special city," Mr Jazaairy told AFP. In addition, police have increased patrols around the city and set up extra checkpoints, he added.

Najaf was in the grip of a fierce rebellion by militiamen loyal to radical Iraqi Shia Muslim leader Moqtada Sadr against the occupation forces of the US-led coalition until early this month.

Although most of Sadr's forces allowed police to deploy around the city on June 4, they have refused to relinquish the shrine of Hazrat Ali (AR). In a sign that tensions were easing, Sadr a week ago told those members of his Mehdi Army who do not live in this holy city to go home. -AFP/Reuters