by Jay Deshmukh
NAJAF, Iraq, Aug 23 (AFP) - US planes pounded Najaf's cemetery and historic centre near the Imam Ali shrine on Monday, dimming hopes of a peaceful end to a near three-week stand-off between US-led Iraqi forces and Shiite militia.
While American journalist Micah Garen was recuperating after an eight-day hostage ordeal in southern Iraq, fears were growing for one Italian and two French journalists, who have been missing for three days.
Dense black smoke spewed into the sky above the vast Valley of Peace burial ground after a deafening explosion. A second blast was heard in the early afternoon as a US plane flew overhead.
Hours later, another two raids targeted the Old City, as sporadic gun and mortar fire reverberated through the ravaged streets around the city's revered shrine, an AFP correspondent on the scene said.
A hole one metre (more than three feet) across was punched into the outer wall of the shrine compound overnight, scattering debris across the marble floor.
Sadr supporters said it had been caused by a missile fired by a US helicopter, although the US military denied it had targeted the shrine.
No US tanks could be seen in the immediate surroundings and there were fewer militiamen than usual around the mosque.
In the evening the two sides exchanged heavy fire as planes hovered overhead.
"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 Mehdi Army commanders.
A US military spokesman said: "The fire was not directed at the shrine. It did not hit the wall or any other holy site in the area."
Three days after Sadr aides said they would hand over control of the shrine to representatives of Shiite Islam's most revered cleric, Grand Ayatollah Ali al-Sistani, the deal was still in limbo.
"There is no fresh development ... There is contact between them and us but there are differences on forming the committee due to the security situation," said Sadr spokesman Sheikh Ahmed Shaibani, referring to proposals for a panel to carry out a full inventory of the shrine's contents before the handover.
The Mehdi Army has occupied the Imam Ali complex since a first uprising in April.
Sistani, recovering in London after medical treatment, has been reluctant to take back the shrine without ensuring nothing is missing. The Mehdi Army is also unwilling to surrender control amid any suggestion of impropriety.
One of an eight-member team from a landmark national conference who tried but failed to meet Sadr last week in a bid to persuade him to disarm and leave the shrine said they were waiting for a signed letter from the cleric himself before trying again.
"We are waiting his response. When we receive it, we will go back," said Sheikh Mohammed Mohammed Ali.
One person was killed and three wounded overnight, said a doctor at the shrine's makeshift clinic. At least four more patients were brought in after daylight fighting.
Despite a resumption of crude exports from southern Iraq, world oil prices rose again in London as hopes dimmed of a resolution in Najaf, opening at 43.85 dollars a barrel of Brent North Sea crude, up 33 cents.
As US military officials said it could take up to 10 years to crush the insurgency, one Turk and five Iraqis were killed in a string of deadly roadside attacks, US military and police sources said.
But Garen, who was released Sunday after Sadr officials interceded with his captors, was understood to be back at work in Iraq, after a check-up by an American doctor.
"He was in good spirits and in good medical condition. He bid us farewell and it is my understanding that he wanted to continue to do what he's here to do," a US embassy spokesman said.
The 36-year-old founded Four Corners Media, a company that produces documentary videos, photos and text.
However, there was still no news 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 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.