by Kamal Taha
BAGHDAD, Aug 30 (AFP) - Rebel cleric Moqtada Sadr, the most serious threat yet to the authority of Iraq`s interim government, ordered his militiamen to silence their guns Monday, as a deadline passed for two French hostages.
Despite flying top diplomats to Baghdad and Amman to try to secure the release of journalists Christian Chesnot and Georges Malbrunot, Paris refused to reverse a ban on Muslim headscarves in schools as demanded by their Islamist captors.
The Islamic Army in Iraq, which has already claimed the murder of an Italian journalist who also went missing about 10 days ago, had set a deadline of 1839 GMT in Saturday`s ultimatum sent to Arabic satellite news channel Al-Jazeera.
The hostage crisis cast a pall over the announcement by aides that Sadr was halting his deadly uprising and turning his militant group into an ordinary political party, as demanded by the Iraqi government.
"The commander of the Sadr movement, leader Moqtada Sadr, announced today in Najaf the end of all fighting in the whole of Iraq and the integration of his movement in the political process," Sheikh Naim al-Qaabi told reporters.
"This decision shows that the Sadr movement wants peace and participation in the country`s political process, and within the next two days the Sadr movement will explain its political vision," he added.
"We are sure it will play an important part in the country`s political life."
Shortly after the declaration, crude exports from southern Iraq bounced back to 1.8 million barrels per day despite several attacks on pipelines, said an official from the state-run South Oil Company.
Crude oil futures also fell below 42 dollars in New York for the first time since late July as Sadr`s ceasefire offered hopes of improved stability in what ought to be the world`s second-largest oil producer.
Three days earlier, top Shiite cleric Grand Ayatollah Ali al-Sistani ordered the Sadr to end three weeks of deadly fighting with US and Iraqi forces around the shrine towns of Najaf and Kufa.
Sadr`s Mehdi Army had mounted the largest anti-US rebellion since the fall of Saddam Hussein in 2003.
The government, saying it would welcome any peace move, stressed it had not initiated the process and described Sadr`s ceasefire order as a "face-saving formula after the evacuation from Najaf".
"Having vacated Najaf, it`s very hard for them to go anywhere else," an interior ministry spokesman told AFP.
Although Allawi vowed two days ago to crush any group refusing to disarm, the Washington Post reported that he had held private talks with Sunni Muslim insurgent representatives in a bid to persuade them to take up an amnesty.
No deal had yet been reached, but Allawi was quoted as saying some of the representatives were "changing horses... and taking the amnesty seriously".
One of the most dangerous of the militant groups, the Islamic Army in Iraq, has been holding the two French hostages and on Saturday served Paris with a 48-hour ultimatum to lift its ban on Islamic headscarves in state schools.
France`s ambassador to Algeria, Hubert Colin de Verdiere, arrived in Baghdad to spearhead 11th-hour efforts to secure their release while Foreign Minister Michel Barnier made a solemn appeal from Cairo for their lives to be spared.
They were "doing their job in Iraq to explain to the world, describe the reality of the situation and the difficult living conditions of the Iraqi people," he said.
Barnier later flew to Amman to press his mission, arriving shortly after the kidnappers` ultimatum expired. There was no immediate news on the hostages.
A US soldier was killed and two others wounded when a homemade bomb exploded in northern Iraq on Sunday, the US military said, bringing to at least 729 the number of American soldiers who have been killed in action in Iraq since 2003.
Faced with the endemic violence, the US ambassador in Iraq has suggested more than three billion dollars of US reconstruction aid be diverted to increasing security, boosting oil output and creating local jobs, the Wall Street Journal reported.
John Negroponte made the case in a cable to the US State Department last week, describing the dire security situation and saying the insurgency had become more protracted than anticipated.
The money is part of 18.4 billion dollars in Iraq reconstruction aid that Congress approved in November.