The government assault has exposed deep divisions between rival factions within the majority Shi'ite community. It is also a major test for the U.S.-backed government to prove that Iraqi forces can stand on their own and eventually allow U.S. forces to withdraw from Iraq.
However, the challenges for government forces appear to be mounting as violence and unrest spreads to other Shi'ite areas and to parts of Baghdad.
In a move that suggests the operation has not progressed as smoothly as the government initially hoped, al-Maliki extended a 72-hour deadline that he had set for the Al-Mahdi Army to lay down its weapons.
Al-Maliki now says his government will offer cash payments to militants who surrender their weapons by April 8.
Al-Sadr -- who helped install al-Maliki in power after the 2005 elections but later broke with him -- has called for talks with the government to resolve the current conflict. But al-Maliki has vowed to battle what he calls criminal gangs and outlaws in Al-Basrah "to the end" if they refuse to surrender their weapons.
Al-Sadr's followers have responded by staging a "civil disobedience" campaign that has forced many schools and shops to close.
Al-Sadr also has threatened to declare a "civil revolt" if the government crackdown is not halted. More than 150 people have been killed in fighting since the assault began on March 25.
Some 30,000 government troops involved in the operation had cordoned off at least seven districts of Al-Basrah by March 27, but were being repelled by Al-Mahdi Army fighters overnight.
One fighter loyal to al-Sadr claimed that many of government troops were handing their weapons over to help the Al-Mahdi Army.
He said that Al-Sadr's forces "thanked them as they did not fight their brothers in the Al-Mahdi Army. We want to tell al-Maliki that Al-Basrah is safe. So we ask him not to ignite the situation with a mounting number of casualties in Al-Basrah."Violence Spreads Across South
Meanwhile, the fighting has spread to other predominantly Shi'ite areas -- from the cities of Al-Kut, Al-Hillah, Al-Nasiriyah, Al-Diwaniyah, Al-Amarah, and Karbala to 13 predominantly Shi'ite neighborhoods of Baghdad that have an Al-Mahdi Army presence.
Protesters in Baghdad on March 27 (AFP)
Reuters reported from Al-Nasiriyah that Al-Mahdi Army fighters loyal to Al-Sadr took over the center of that city. The correspondent said he could see groups of al-Sadr's fighters roaming the streets with machine guns and rocket-propelled grenade launchers. Militants have also reportedly taken control of the town of Shatra about 40 kilometers north of Al-Nasiriyah.
The spreading violence also has affected the country's vital oil exports. Saboteurs attacked the southern oil pipeline system on March 27, briefly interrupting exports through the south of the country for the first time in years.
Lawmakers in Baghdad have called an emergency session of parliament to discuss how to resolve the conflict. Parliament speaker Mahmud al-Mashhadani says representatives of Sunni and Shi'ite parties -- including lawmakers loyal to al-Sadr -- have agreed to attend the special session.
The fighting has wrecked a truce that al-Sadr imposed on his militia in August 2007, which Washington had said helped curb violence.
Al-Sadr's followers claim political parties in al-Maliki's Shi'ite-led government are trying to use military force to marginalize their rivals ahead of local elections due by October.
Amid the confusion and conflicting claims, U.S. President George W. Bush has praised the operation -- the largest military campaign carried out yet by al-Maliki's security forces without help from U.S. or British ground troops.
"This offensive builds on the security gains of the surge and demonstrates to the Iraqi people that their government is committed to protecting them," bush said. "There is a strong commitment by the central government of Iraq to say that no one is above the law. This operation is going to take some time to complete. And the enemy will try to fill the TV screens with violence. But the ultimate result will be this: terrorists and extremists in Iraq will know they have no place in a free and democratic society."
Bush also argued that there are direct links between Iran and Shi'ite militia violence in southern Iraq.
"Iraqi security forces are waging a tough battle against militia fighters and criminals in Basra, many of whom have received arms and training and funding from Iran," Bush said. "Prime Minister Maliki's bold decision -- and it was a bold decision -- to go after the illegal groups in Basra shows his leadership and his commitment to enforce the law in an even-handed manner."