NAJAF, Iraq, Aug 18 (AFP) - An attempt to launch peace talks with Moqtada Sadr fell through Tuesday when the firebrand leader of a Shiite militia holding the Imam Ali shrine here failed to show up for a meeting with delegates of a national conference who had hoped to open talks.
A Sadr aide said the cleric was not able to enter the shrine area to meet the delegates because the road was insecure due to "aggression by the Americans."
The delegation led by Sadr relative Hussein al-Sadr was instead received by two of Sadr`s deputies who later said that "the encounter was positive."
Al-Sadr said that he was assured by Sadr`s aides that the cleric does not reject their initiative.
"We hope there will be better circumstances to meet with him," he said.
The tense standoff around one of Shiite Islam`s holiest shrines fanned sporadic deadly clashes across Shiite central and southern Iraq, with a US soldier killed in the capital and a British soldier dead in the main southern city of Basra.
Mortar attacks in the capital killed seven people and wounded 49 -- two of them hurt when a projectile landed inside the fortified Green Zone close to where the meeting was underway.
Persistent gunfire, punctuated by mortar blasts, paralysed Najaf`s historic Old City as US warplanes screeched overhead and snipers took up position around the Imam Ali mausoleum.
Speaking in Turkey, Iraqi President Ghazi al-Yawar urged Sadr to "stop this nonsense" and join the political mainstream.
Ghalib al-Jazairi, Najaf`s police chief, has threatened to storm the shrine "and kill each one of them" unless they disarm and leave of their own accord.
Meanwhile, Italy`s Prime Minister Silvio Berlusconi and British counterpart Tony Blair issued a cautionary appeal to their US ally George W. Bush and the new Iraqi government to resolve the conflict in Najaf without damaging its Muslim holy site.
The statement emerged at the end of a relaxed private visit by Blair and his wife Cherie to Berlusconi`s holiday mansion here.
They "expressed hopes for a successful national conference in Iraq and a resolution to the situation in Najaf," according to the statement.
"Italy and the UK are committed to a future of peace for the Iraqi people and the protection of the holy sites, respecting an ancient civilization which rejects violence and terrorism," it added.
This was a pointed reference to the concern that more bloodshed and damage to the city`s holy site could serve to further inflame radical opposition to the fledgling Iraqi government, and foreign troops in the country.
It is a concern fuelled by reports at the weekend that hundreds of Iraqi army recruits had switched sides, and gone to Najaf to support Sadr.
Southern crude oil exports from Iraq continued to operate at half rate because of the threat of attack from Shiite militia, an official said.
"One of the two pipelines is closed for security reasons and pumping stands at around 36-42,000 barrels an hour," against 80,000 normally, the official of the Southern Oil Company told AFP.
In the main southern city of Basra, the British soldier was killed and others wounded in clashes with Sadr militiamen, the defence ministry announced in London.
One Iraqi was also killed and six wounded, a British spokesman in Iraq said. Medics and militia commanders said the dead man was a militiaman but five of the injured were civilians.
In the Baghdad Shiite neighbourhood of Sadr City, one US soldier was killed and a number wounded in a series of rocket-propelled grenade and improvised bomb attacks that also destroyed three armoured cars, the US military said.
The death bought US losses in action since last year`s invasion to 703, based on the most recent statistics on the Pentagon website.
In the southern city of Nasiriyah, three Italian soldiers were wounded when their patrol was targeted by assailants seemingly separate to Sadr`s Mehdi Army, the ANSA news agency said.
At the national conference -- heavily overshadowed by the Najaf conflict -- 450 delegates accused the main political parties of hijacking a scheduled vote for a new interim legislature, saying members were chosen long ago in secret.
As dusk fell, Fuad Maasum, head of the event`s preparatory committee, announced that the vote would be delayed until Wednesday.
Many protestors had threatened to quit the conference unless the voting mechanism was changed.
"If this is not dealt with today then the whole conference will fall apart and I will walk out, with hundreds with me," said Aziz al-Yasseri, from the broad coalition National Democratic Movement.
Nineteen of the 100 seats on the body have already been handed to members of the defunct Governing Council, which was established by the US-led occupation after the fall of Saddam Hussein in 2003 and included many returning exiles.
According to conference rules, delegates of different leanings -- religious and secular, Kurdish and Arab -- are supposed to draw up lists for the remaining 81 seats and submit them to an open vote.
Meanwhile, the fiancee of US journalist Micah Garen, who was abducted in Nasiriyah on Saturday, appealed to his kidnappers to free him.
Garen, 36, is the founder and head of Four Corners Media, a company specialising in film, photo and written documentaries.