"We call on the Mehdi Army to hand over their heavy weaponry according to an agreement with Naim al-Qaabi," troops on two tanks and two Humvees shouted through loudspeakers, referring to a senior Sadr aide in Baghdad.

None of the militiamen in the sprawling Baghdad slum could immediately be seen handing over their rocket-propelled grenade launchers or mortars but a surprise ceasefire ordered by Sadr on Monday has so far been observed.

Qaabi confirmed that handing over heavy weapons was part of an agreement being brokered between his movement and the Iraqi government, stressing however that no final deal had been reached.

"Now we are negotiating with the government and the talks are not over yet. Once both sides agree, we will implement all articles of the deal. One of them provides for collection points to return weapons," he told AFP.

"Now US tanks are calling on people in Sadr City to hand over weapons but this is not going to help a lot unless the agreement is signed by both sides. Today will be the last meeting of the talks with the government."

Representing the Sadr movement are Qaabi himself, Sheikh Yusef al-Nasseri and Sayed Ali al-Yasseri, while a group of tribal leaders headed by Sayed Karim al-Bakhashi are also taking part in the talks, he said.

National Security Adviser Muwafaq al-Rubaie and minister without portfolio Kassem Daud are representing the government.

"The agreement being brokered does not affect personal weapons and we need first to establish collection points across Sadr City where money will be handed to those who turn in their weapons," Qaabi said.

"Another point of the agreement provides guarantees that members of the Sadr movement will not be hunted down and that those detained should be released."