BAGHDAD (AFP) - US Defence Secretary Donald Rumsfeld, on a surprise visit to Iraq, predicted violence would increase ahead of January`s elections as rebel attacks killed 11 people including a US soldier.
But giving a boost to efforts to restore security, rebel cleric Moqtada Sadr`s Mehdi Army militia was poised to disarm in Baghdad`s Shiite slum of Sadr City, while leaders from the rebel bastion of Fallujah were negotiating a truce with the Iraqi government.
Eying January`s high stakes elections, Rumsfeld made an unannounced trip to Baghdad and the Al-Asad airbase in Fallujah`s restive province of Al-Anbar for talks with Iraqi officials and US commanders.
"We expect the level of violence and difficulties to increase between now and the Iraqi elections in January," he told hundreds of troops at al-Asad. "So I don`t see that we would have a reduction in US and coalition forces between now and January."
In Baghdad, Rumsfeld and Prime Minister Iyad Allawi held talks on the scheduled elections, endangered by the endemic violence that has gripped the nation since the downfall of Iraqi dictator Saddam Hussein.
Insurgents greeted Rumsfeld`s visit with two attacks in the capital, including an explosion near Iraq`s oil ministry that killed at least 10 people.
Witnesses described the blast as a rocket attack and doctors put the death toll at 10. An oil ministry official described it as a suicide car bombing and said 17 people were killed.
Elsewhere in the capital, a car bomb exploded in central Baghdad`s Zayyuna district, killing the vehicle`s driver and a US soldier, police and the military said.
The US military also announced the death of a US marine in al-Anbar province, raising the number of soldiers killed in Iraq since the 2003 invasion to 1,065.
The two attacks were claimed in a statement posted on an Islamic webside purported to be from Islamic militant Abu Mussab al-Zarqawi`s Unity and Holy War group.
Despite the violence, Allawi`s government was on the brink of ending six months of brutal urban fighting in the capital`s impoverished district of Sadr City.
A senior aide to the rebel cleric Sadr said an agreement due to come into force Monday had been reached for the Iraqi government to free all Sadr partisans and to stop pursuing members of his Mehdi Army militia.
In return, the Sadr militia would suspend attacks against US and Iraqi forces and hand in heavy and medium-sized weapons in the squalid district, said Sheikh Abdul Zahra Suwaidiy.
After August clashes in Najaf, Sadr`s Mehdi Army agreed to leave the Shiite shrine city, but there was no formal disarmament of the militia, which is spread around the country.
Since June, Sadr has hinted he was willing to disarm and join the political process, but his militia has repeatedly had skirmishes with US forces.
Interior ministry spokesman Sabah Kadhim expressed cautious optimism about the deal but warned that "as far as the interior ministry is concerned, action speak louder than words."
A day after the announcement of the ceasefire, young fighters were seen defusing roadside bombs and a couple of them detonated in the teeming slum of 2.5 million people. Others were cleaning the streets and collecting garbage.
Sadr`s main representative in Baghdad, Sheikh Ali Sumeisim, was meeting Sunday with fighters to tell them about the initiative, Suwaidiy said.
"I am rather optmistic this might work," Amer al-Husseini, a senior member of the movement, told AFP. "I hope, I really, really hope the Americans and the Iraqi government would keep their word"
A deal with Sadr would shore up one flank for the US and Iraqi forces in the run-up to national polls, allowing them to concentrate on Fallujah, the epicentre of the Sunni Muslim insurgency, and other trouble spots around central Iraq.
In talks with figures from Fallujah, the Iraqi government is hoping to avert a violent resolution to reassert control over the city, which has become a suspected base for foreign fighters like Zarqawi.
Sheikh Khaled Hamoud, a tribal leader, said the sides were on the verge of a breakthrough. "I would say that we are close... but nothing has been finalised yet," he told AFP.
Sticking points remain the make-up of a security force for Fallujah and whether US troops will be permitted to enter the city -- a virtual necessity for the supervision of US-funded rebuilding projects.
Keeping up the pressure on insurgents, some 2,000 US and Iraqi troops arrested 15 suspected insurgents Saturday on the fifth day of a sweep aimed at restoring law and order just south of Baghdad, the US military said.
Revelations of the last hours of British hostage Ken Bigley, whose head was sawed off by Zarqawi followers, emerged Sunday as a video of his execution was posted on the internet.
Bigley made a desperate, final appeal for Prime Minister Tony Blair to save his life before he was beheaded by his captors in Iraq, the video showed.