American commanders believe Shia gunmen may be holding a kidnapped US soldier in the east Baghdad slum and since last week have been maintaining a cordon of checkpoints and roadblocks around the area.

Iraqi and US forces have also launched raids inside the district, most recently on Tuesday morning, when they arrested three suspects.

Anger has been growing inside Sadr City, and on Tuesday militants loyal to radical cleric Moqtada al-Sadr ordered a general strike, shutting down shops, offices and schools in an area of 2.5 million people.

The Shia prime minister, who owes his job to the votes of pro-Sadr lawmakers, responded by ordering the US blockade lifted.

"The prime minister, in his capacity as commander in chief of the armed forces, has decided to lift the blockade of the access roads to Sadr City and other areas of Baghdad," a statement from Maliki's office said.

Maliki said he expected checkpoints to be lifted by 5:00 pm (1400 GMT), but added that it could be reimposed after dark during Baghdad's nightly curfew.

It was not clear whether the US military would obey the prime minister's order and, in a new sign of the lack of coordination between the allies, US headquarters said they had only learned of it through a news release.

"Our coalition force commanders have received the press release from the Prime Minister's office and are determining how coalition forces can best address the Prime Minister's concerns about checkpoint operations," it said.

Rescuing missing soldiers is a priority for US forces, but disobeying Maliki's command would risk reopening rifts in the Iraq-US alliance just days after a White House damage limitation exercise papered over an earlier spat.