by Jay Deshmukh
NAJAF, Iraq, Aug 23 (AFP) - US helicopter gunships pounded positions held by Shiite militiamen near Najaf`s Imam Ali shrine overnight, as continued fighting dimmed hope of a peaceful end to the near three-week standoff.
Elsewhere US journalist Micah Garen was released eight days after being taken hostage in southern Iraq, but fears continued to grow for two French journalists and an Italian who have not been heard from since Thursday.
Overnight, US helicopters staged at least two attacks on Mehdi Army positions near the mausoleum, and gunfights and mortar blasts continued on Monday, said an AFP correspondent inside the shrine.
However, no US tanks could be seen in the immediate surroundings and there were fewer militiamen than usual around the mosque.
A dent measuring about one metre (three feet) square had been punched about 30 centimetres (one foot) into the shrine`s outer compound wall overnight, with rubble and spent parts of a rocket littered on the marble floor.
Supporters of militia leader and fanatical cleric Moqtada Sadr said it had been caused by a helicopter missile, but the US military denied that the shrine had been targeted.
"It was around 11:00 pm to 11:30 pm (1930 GMT). Two rockets were fired from an American Apache. One hit the western wall of the shrine and the other a nearby hotel," said Sadr official Sheikh Ali Hussein Ali.
The hotel is a known resting place for captains in the Mehdi Army.
"US forces responded to hostile fire, but the fire was not directed at the shrine. It did not hit the wall or any other holy site in the area," a US military spokesman said.
One person was killed and three wounded in overnight violence, said a doctor at the Imam Ali`s clinic, with another four patients brought in since daybreak.
Three days after an agreement was announced for Sadr`s fighters to hand over the keys to the shrine to representatives of Grand Ayatollah Ali al-Sistani, Iraq`s top Shiite religious authority, the deal was still in limbo.
"There is no fresh development (on the handover)... There is contact between them and us, but there are differences on forming the committee due to the security situation but we are awaiting their response," said Shaibani.
The Mehdi Army has occupied the complex, one of the holiest sites in the Shiite world, since their April uprising, and 73-year-old Sistani is recovering in London after medical treatment.
He has been reluctant to take back the shrine without ensuring that nothing is missing, and the Mehdi Army is unwilling to surrender control amid any suggestion of impropriety.
Although Sadr aide Ali Smeisim said they were expecting a second visit from Iraq`s national conference, a member of the eight-member team who tried but failed to meet Sadr last week said they were waiting for a signed letter from the cleric himself before setting out again.
The conference demanded that the cleric leave the shrine, disarm his militia and transform it into a political organisation.
"We are waiting his response. When we receive it, we will go back again," said Sheikh Mohammed Mohammed Ali.
Asked why there were fewer militiamen than usual visible on the streets, Shaibani said tactics had shifted up a gear.
"The war has developed and the Mehdi Army is now organised and using military tactics of hiding. It is not run randomly anymore," he said.
Despite a resumption of crude exports from southern Iraq, world oil prices rose again in London as hopes dimmed of a resolution of the Najaf conflict, opening at 43.85 dollars a barrel of Brent North Sea crude, up 33 cents.
Meanwhile, journalist Micah Garen was released Sunday after Sadr`s office mediated with his kidnappers in the southern city of Nasiriyah.
"I am very thankful to al-Sadr, the office of al-Sadr for what they did for me and I am very happy," Garen told Al-Jazeera television through a translator, adding he was in good health.
There was still no news Monday morning of French reporters Georges Malbrunot and Christian Chesnot, who were last seen in Baghdad on Friday and are thought to have been kidnapped on their way down to Najaf.
Italian reporter Enzo Baldoni has also been missing since Thursday. The body of what was thought to have been his driver was discovered near Najaf.