As a tenuous cease-fire in the central city of Fallujah continued to hold for a fourth day, al-Sadr's militia, known as the al-Mahdi Army, was holding out in the Shiite holy cities of Najaf and Kerbala, south of the capital Baghdad.
A military convoy traveling from Baquba to Najaf Monday night came under small arms fire, and one American soldier was killed and a civilian contractor wounded, officers in the convoy said.
In addition, a U.S. military helicopter went down Tuesday outside of Fallujah, injuring three of the crew. A team securing the site later suffered unspecified casualties when it was ambushed by insurgents, Lt. Col. Brennan Byrne said, according to the Associated Press. Some reports indicated one Marine may have been killed by mortar fire, although that could not be confirmed.
Reports from the scene said masked militants hit the helicopter with a rocket-propelled grenade, although Byrne said it was not known why the Sikorsky H-53 went down.
A delegation of grand ayatollahs, meanwhile, were reportedly trying to work out a compromise with al-Sadr to avert a U.S. attack on Najaf, home of the holiest Shiite site, the Imam Ali Shrine.
Col. Dana J.H. Pittard, commander of the force, said his troops were aware that a "single shot in Najaf" by U.S. soldiers could outrage Iraq's powerful Shiite majority.
In a concession to American demands, al-Sadr ordered his militiamen out of police stations and government buildings in Najaf and the nearby cities of Karbala and Kufa, and the militants largely stayed out of sight as the police went back on patrol. But the militia itself did not disband, despite U.S. demands.
The U.S. military said about 70 Americans and 700 insurgents had been killed in Iraq this month, the bloodiest since Baghdad fell a year ago.
An estimated 880 Iraqis have been killed in Fallujah since April 5, when the U.S. military launched a major operation to secure the Sunni city following the brutal slayings of four American defense contractors, according to an AP tally based on reports from the U.S. military, Iraqi police and hospitals.
In addition, insurgents have reportedly taken about 40 people from 12 countries hostage, although some were subsequently released.
Four Italians working as private guards for DTS Security, a U.S. company, were reported missing in Iraq on Tuesday. Two U.S. soldiers and seven employees of a U.S. contractor, including Thomas Hamill, a truck driver for Kellogg, Brown & Root whose abductors have threatened to kill, have been missing since Friday.
Three Japanese civilians -- two aid workers and a photojournalist -- who were taken by militants vowing to kill them if Japan did not withdraw its troops from Iraq have not been heard from since April 8.
Eight Ukrainian and Russian employees of a Russian energy company were released Tuesday after less than a day in captivity, the Russian Foreign Ministry said.
Seven Chinese workers were freed Monday after being held for a day.
In other developments, Hazem al-Araji, an aide to al-Sadr for a northern Baghdad district, was detained for five hours Tuesday by the U.S. military and then released, Reuters and the Agence France-Presse reported.
Al-Araji was picked up as he was leaving a central Baghdad hotel after meeting with tribal leaders and giving a news conference. There was no immediate word from U.S. officials on why he was detained.