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Reuters | Latest Financial News / Full News Coverage:

"Iraqi police returned to duty on the streets of Najaf for the first time in weeks in an early sign a truce between U.S. troops and Sadr's militia may be taking hold, witnesses said.

There was no sign of Sadr's Mehdi Army fighters, who have been a common sight in Najaf for weeks, said the witnesses.

Sadr and U.S. forces agreed on Friday to pull back from Najaf in a deal that, if it works, could mark the end of an uprising that has engulfed cities in southern Iraq since April. Hundreds of people have been killed in the violence.

A U.S. commander hailed the deal as a breakthrough and said he would begin pulling back his forces to allow Iraqi police to take over security in the city, home to some of most sacred sites for Iraq's 60 percent Shi'ite majority.

Iraq's top Shi'ite cleric, Ayatollah Ali al-Sistani, thanked Sadr at a meeting on Saturday for ending the uprising, a Sistani aide said. Sistani has criticised both Sadr's militia and the U.S. military for fighting in Iraq's holiest Shi'ite cities.

Riding in the back of pick-up trucks and armed with rifles, police took up positions in Najaf's main streets.

'People now feel relieved and safer. They have missed the police,' said police officer Omar Abdul Hassan, standing by his patrol car near traffic lights on a main street."

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