BAGHDAD, June 7: Nine Iraqi militias have agreed to disband under a deal announced on Monday by Prime Minister Iyad Allawi, but which does not include the major Shia and Sunni groups.

"I am happy to announce today the successful completion of negotiations on the nationwide transition and reintegration of militias and other armed forces previously outside of state control," Mr Allawi said in a statement.

The agreement was reached with nine political parties, most of them participants in the new Iraqi government and affects an estimated 100,000 militiamen. Officials of the US-led Calition Provisional Authority (CPA) made clear the agreement leaves Shia firebrand Moqtada Sadr's militia and other movements fighting the Americans effectively outside the law.

The religious firebrand, whose followers have battled the occupation forces for the past two months, faces a three-year ban from political office if he even scraps his Mehdi Army militia.

Moqtada Sadr aides dismissed the new order, insisting that the Mehdi Army was a popular movement rather than a militia. "This agreement does not concern us because we are not a militia.

We are a popular and radical movement and we are not looking for political posts," said aide Hossam al Husseini. The order makes a distinction for the nine parties that signed up to the agreement, calling them resistance group against former president Saddam Hussein.

Iyad Allawi listed the groups: Kurdistan Democratic Party (KDP); Patriotic Union of Kurdistan (PUK); the Iraqi Islamic Party; the Supreme Assembly for the Islamic Revolution in Iraq (SAIRI) and its Badr Brigade militia; the prime minister's own Iraqi National Accord (INA); Ahmed Chalabi's Iraqi National Congress (INC); the Shia-based Iraqi Hezbollah; the Iraqi Communist Party, and the Shiite fundamentalist Dawa party.

A commander of the former Badr Brigade, general Shaher Faisal al Shaher, was gunned dead on Monday at a crossroads in the Iraqi capital, a SAIRI spokesman in Tehran said. A CPA official told reporters that Dawa, the INC and INA claim they have already dissolved their militias other than small security forces deployed to protect their leaders.

Those bodyguard teams are to be disbanded and turned into private security firms that could be hired to guard political parties or reconstruction projects, the official said.

The law warns of penalties for any political party whose militia takes up arms again. The sanctions are to be announced in legislation later this month. The deal, in the works since February, aims to have 90 per cent of the militias decommissioned by January 2005 and the remainder phased out by next spring, Mr Allawi said.

But implementation hinges on the formation of an Iraqi government oversight committee to ensure that the groups, including Iraq's main Shia and Kurdish parties, truly disband and hand in all arms.

Mr Allawi said about 40 per cent of the decommissioned forces would become ordinary civilians and another 60 per cent would join "the Iraqi armed forces, the Iraqi police service, or the internal security services of the Kurdish regional government".

The Kurdish regional government, in the northern provinces of Sulaimaniyah, Arbil and Dahuk, would most likely absorb the estimated 70,000 to 75,000 Kurdish militia fighters of the KDP and PUK, known as the peshmerga.

The new Kurdish security units are slated to be mountain rangers and counter-terrorism units and rapid reaction forces. The 40-odd percent of former militiamen returning to civilian life would benefit from professional training in other fields and from similar welfare to that granted to retired soldiers.

The CPA had already formally outlawed militias under Iraq's interim constitution. Still, CPA officials admitted they could not guarantee the groups would not violate the agreement, or that militiamen in the new security forces would not retain their old loyalties.

"If you give them a new job, ... you give them a new purpose. And over time, those connections don't go away but hopefully they are just like any other," a coalition official said.

Another coalition official told AFP many of the militias, including the Badr Organisation, with an estimated 15,000 members, had initially been reluctant to sign onto the deal. -AFP