Powerful Iraqi Shia cleric Moqtada Al Sadr is widely expected to extend a ceasefire by his Mahdi Army militia on Friday, a decision Washington says is important to maintain security gains.
US officials say the ceasefire, in operation for the past six months, has helped to sharply reduce attacks on US and Iraqi troops as well as tit-for-tat sectarian violence in Iraq.
Two senior officials from Sadr's movement told Reuters on Thursday he had issued a declaration calling for a six-month extension of the truce and that this would be read out during Friday prayers at Shia mosques affiliated with the cleric.
"The general idea is that there will be an extension," said one of the officials, declining to be named. "[Sadr] has distributed sealed envelopes to the imams of the mosques. They cannot be opened before [Friday]."
Many Mahdi Army members and Sadrist political leaders want to scrap the truce, saying it is being exploited by Iraqi and US forces to arrest Sadrists, especially in southern Iraq, where rival Shia factions are vying for dominance.
Sadr's spokesman Salah Al Ubaidi has said in the past the cleric would issue a statement by midnight on Saturday if he was renewing the truce. Silence would mean it was over.
The US military blamed the Mahdi Army for fuelling a cycle of sectarian violence with Iraq's Sunni Arab minority in 2006 and 2007 and at one time called the militia the greatest single threat to peace in the country.
Sadr called the ceasefire after deadly clashes between his militia, Iraqi forces and the Supreme Islamic Iraqi Council, a rival Shia faction, in the holy city of Kerbala.
Analysts say he decided on the truce to bring into line elements in the militia, some of whom had become involved in gangsterism and organised crime.
US commanders say violence in Iraq has dropped 60 per cent since June 2007, owing to Sadr's ceasefire, 30,000 extra US soldiers and many Sunni Arab leaders turning against al Qaeda.
Sadr's decision could prove vital in determining whether the security gains can be maintained, thus allowing the US military to continue withdrawing soldiers beyond the more than 20,000 that are scheduled to be leave by July. There are currently around 155,000 US soldiers in Iraq.
US Defense Secretary Robert Gates said on Friday he hoped to pull more troops out of Iraq after a brief pause in withdrawals in July or August to give the military time to assess the likely impact of lower force levels.
"My hope is that we will be able to further draw down our troops in Iraq over the course of the next 10 to 12 months," he said, speaking in a plane en route to a meeting in Australia.
The US commander in Iraq, General David Petraeus, has recommended a pause in withdrawals once the initial reductions are complete in July to assess the security situation. Gates said Petraeus convinced him that a pause would be appropriate.
While praising Sadr for the truce, the US military has pursued what it calls rogue elements of the Mahdi Army. It accuses Iran of arming these groups, a charge Tehran denies.
On Thursday, more than 1,000 Sadr supporters gathered in Baghdad's Sadr City slum, a Mahdi Army stronghold, to mark the fourth anniversary of his uprising against US forces in 2004.
They marched through the streets carrying empty coffins to represent Mahdi army members killed in battles with US troops. (Reuters)