NAJAF: In an alleyway next to Najaf's Imam Ali shrine, Commander Sayed Haider rested on Friday. For more than three weeks he and his fellow fighters from the Mahdi army had battled against the vast firepower of the US military. Now was a time to reflect.

"We believe that we are right. This is our country. This is our city. We will not accept that people come and occupy our land," he said. Nearby, fighters were lugging the corpse of a dead comrade out from the shattered ruins of a hotel; others were brewing tea.

Thousands of pilgrims, meanwhile, had begun flowing past the sandbags and metal barricades which until recently had blocked the path of American tanks. "We didn't give in for one reason," Mr Haider explained, as his platoon posed for photos, still holding their rocket- propelled grenade launchers. "Our beliefs," he said.

In the end, the battle for Najaf that had plunged Iraq's interim government into crisis ended, to everyone's surprise and relief, peacefully last week. On Thursday evening Grand Ayatollah Ali al-Sistani, Iraq's most important Shia leader, and Mr Haider's boss Moqtada al-Sadr, had agreed a deal under which Mr Sadr's Shia militia would vacate the Imam Ali shrine and go home. To some surprise, they did.

Initially not everyone was on message: as the pilgrims filed through into a narrow alleyway of bullet-ridden camera shops and colonnades, a sniper started firing. But by mid-morning, the mood had turned jolly.

"I've been here for five months. I've only seen my wife once a month during that time. I'm going back to Baghdad as soon as I've finished my breakfast," Abu al-Musawi said, waving a victory sign. "It's peace," he added.

Inside the shrine, dozens of Sadr supporters were dancing in a circle, waving placards of their leader; outside in the street a man was pushing a cart, carrying a mortar ineptly hidden under a blanket.

Asked whether he had now handed in his Kalashnikov to the Iraqi authorities, Abu Gaffar, a 25-year-old Mahdi army fighter, looked baffled. "It's my personal weapon. I can't give it to the police or the army. I'll keep it in a safe place," he promised.

Until Thursday, the market square leading to the shrine and the alleys around it had been the centre of vicious fighting between US marines and the Mahdi. On Friday, across what was the frontline, the full scale of the devastation became clear.

Tank rounds littered the road; the al-Dawha hotel had been blown apart; several of the tombs in Najaf's old cemetery had been pulverized. The souk was a tangle of metal debris. Over in the old city it was the same story. In among the piles of rubbish lay a dead dog; from the seemingly empty houses came the smell of rotting flesh.

But what had it all meant?

In a building that served as Mr Sadr's Sharia court, just behind the shrine, police stumbled upon some of his army's apparent victims. They counted 20 corpses - stinking, blackened and disfigured, on the floor beneath a judicial clock. It appeared they had been tortured.

Given the state of the bodies, nobody could be sure. But other survivors were unequivocal in their praise for Mr Sadr. "Moqtada is the son of Iraq," Abu Ahmed, 28, said on his way to the shrine, his two-year-old son Ahmed perched on his shoulders clutching a multicoloured plastic Kalashnikov.

What kind of future did he envisage for Ahmed? "He'll join the Mahdi army," Mr Ahmed said. "I'll teach him to fight Americans." By late morning the human shields who had spent days sleeping inside the Imam Ali shrine had left.

The cleaners had arrived and were rolling up the carpets. A few golden tiles had fallen off one of the minarets, but otherwise the building appeared remarkably undamaged.

In an air-conditioned audience room, Mr Sadr's spokesman Sheikh Ahmed Shaibani explained the five-point peace plan signed by Mr Sadr and Mr Sistani. Under the agreement the Mahdi army would leave Najaf and Kufa; the Iraqi police would take over security in both towns; and the Iraqi government would compensate those whose property was destroyed in the fighting.

The Americans would also pull out of both cities. Asked what the uprising had achieved, Mr Shaibani said it had proved that the al-Marjia'ya - the committee of Shia scholars headed by Mr Sistani - was the ultimate authority in Iraq.

He added: "The Mahdi army will never be disarmed. We have proved it is a religious army." Tantalizingly, Mr Shaibani hinted that Mr Sadr might take up a post in Iraq's next government - provided next year's elections were "honest" and the Americans did not try to manipulate them.

The political parties would also create a "suitable environment" for a proper census to be carried out to facilitate elections and the "return of full sovereignty" to Iraq, he announced.

By Friday afternoon Iraqi troops were patrolling the old city for the first time; American soldiers were loafing some distance away on a traffic roundabout. Three tanks were sitting in a dusty car park.

Earlier, before going home, the Mahdi army fighters had been recounting their tales of martyrdom. "In the last couple of hours before the cease fire one of my friends died while he was firing his Kalashnikov at a helicopter," Jawad Abdul Khadi, 24, said. "Fortunately our brothers shot it down over the cemetery."

Mr Khadi claimed that during the entire battle only 61 of his "brothers" were killed - with only "one or two fighters" dying each day. And what would happen now he was asked? "There are still a lot of us left," he said. -Dawn/The Guardian News Service.