Reports say that Iraqi police have moved in to take control of the area around Al-Najaf's Imam Ali Mosque.
Some reports earlier today said al-Sadr militia at the shrine were handing in their light weapons but keeping some heavy arms.
U.S. Secretary of State Colin Powell today praised the peace deal. Powell said that the agreement showed Iraq's interim government has "started to show leadership and potential" by helping to resolve the three-week-long standoff with al-Sadr troops in the Iraqi shrine city.
The peace deal was brokered largely with help from top Shi'ite cleric Grand Ayatollah Ali al-Sistani. Al-Sistani returned to Iraq yesterday after seeking medical treatment in London.
Powell said it eventually became clear to al-Sadr that "he had to yield to al-Sistani and the government" of Iraq.
Powell also said factions seeking to scuttle fledgling election processes in Iraq and Afghanistan "can't be allowed to win and they will not win."
Factbox: Iraq's Holy City of Al-Najaf
For the latest news on Iraq, see RFE/RL's webpage on "The New Iraq".