Shiite militants agreed on a ceasefire in Baghdad's embattled neighborhood of Sadr City, an aide to a high level cleric said Saturday, holding out hope that weeks of clashes in the capital could be at an end.

In the northern city of Mosul, an Iraqi army commander announced the start of a long anticipated offensive against al-Qaida in Iraq's last urban stronghold.

Sheik Salah al-Obeidi, an aide to anti-American cleric Muqtada al-Sadr, said the cease-fire will go into effect Sunday.

The cease-fire may not necessarily end seven-week-old clashes in Sadr City, the stronghold of al-Sadr's Mahdi Army. The U.S. military has blamed clashes on groups who broke away from the main organization. It remained unclear who will abide by the cease-fire deal.

It is not believed that the bulk of the 60,000-string Mahdi Army has participated in the clashes, but mostly just splinter groups that have refused to honor a general cease-fire ordered by al-Sadr last August. Al-Sadr has directed his supporters to only fight when attacked.

There was no immediate comment from the U.S. military on the reported deal. Iraqi government spokesman Ali al-Dabbagh refused repeated requests for comment.

"Government security forces have the right to pursue wanted people legally with respect to the principles of human rights and anyone from police and other security forces who violates this will be sued according to the law," al-Obeidi said

The newly announced cease-fire comes after government-backed Shiite envoys set strict demands for Shiite militias to end their battles against U.S.-led forces in a meeting with al-Sadr's supporters on Thursday.

Al-Obeidi said an agreement had been reached between the governing United Iraqi Alliance and the Sadrists.

"A 10-point agreement has been reached between members from the United Iraqi Alliance and Sadrist movement in Baghdad and we are informed that Prime Minister Nouri al-Maliki is committed to it," al-Obeidi said in the southern city of Najaf.

He said "the agreement stipulates that Mahdi Army will stop fighting in Sadr City and will stop displaying arms in public. In return, the government will stop random raids against al-Sadr followers and open all closed roads that lead to Sadr City."

Al-Obeidi said a joint committee will observe the implementation of the agreement and any violations by either side.

"This document does not call for disbanding al-Mahdi Army or laying down their arms," al-Obeidi said, rejecting a previous call by al-Maliki.

The clashes in Sadr City began in late March after al-Maliki, himself a Shiite, launched a crackdown against the Shiite armed groups in the southern city of Basra. Aid groups say at least 6,000 people have fled the homes in Sadr City to escape the fighting and seek help as food and medical supplies dwindle.

Meanwhile, Maj. Gen. Riyadh Jalal Tawfiq, the commander of military operations in the northern city of Mosul, issued a statement on Saturday announcing Operation Lion's Roar and Righteousness Battle against al-Qaida in Iraq.

Mosul was considered the last important urban staging ground for al-Qaida in Iraqi and allied groups after losing strongholds in Baghdad and other areas during the U.S. troop "surge" last year.

Provincial forces are "undertaking a new phase of operations in Mosul to counter the terrorist threat there," said Maj. John C. Hall, a military spokesman in Baghdad. "These operations build on operations that have been under way for the past several weeks, targeting al-Qaida in Iraq cells."

He added that "this Iraqi-planned and Iraqi-led series of operations continues to be closely supported by Coalition forces."

In January, Iraq Prime Minister Nouri al-Maliki promised his military was preparing for a "decisive" showdown with insurgents in Mosul, about 225 miles northwest of Baghdad. But no major offensives were mounted, even as al-Qaida in Iraq tried to exert its influence in Iraq's third-largest city through attacks and intimidation until now.

On Friday evening, Iraqi officials imposed an indefinite vehicle ban in the northern province of Nineveh, which includes Mosul. Brig. Gen. Khalid Abdul-Sattar, the provincial security spokesman, said Friday the ban was prompted by intelligence that Sunni insurgents might carry out car bombings.

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Associated Press writers Sinan Salaheddin and Hamid Ahmed contributed to this report.