SENIOR American defence officials have ordered a halt to transatlantic bickering over the British withdrawal from Basra.

According to sources in Washington, a “very senior defence figure” told the joint chiefs of staff, the heads of America’s armed forces, that the “sniping against Britain must cease”.

He reminded them that not only was Britain one of the few allies on which the United States had been able to depend throughout the six years since the September 11 attacks, but it was the only one with war-fighting capability.

After a damaging row that had seen former generals from both sides trading insults about each other’s approaches in Iraq, the relative peace and quiet that descended over Basra last week as British troops withdrew from the Basra Palace complex on the banks of the Shatt al-Arab scarcely suggested defeat, despite the celebratory gunfire of the Mahdi Army.

There was no better ambassador for the British cause than Lieutenant-Colonel Patrick Sanders, commander of the 4 Rifles Battlegroup that left the palace.

“Does this look like it’s a defeated army?” he asked on the BBC’s Ten o’Clock News. “No, it’s complete bollocks,” he continued. The errant expletive was not his only slip.

A more important one came when he added: “Arguably, the peace and quiet we’re seeing in Basra at the moment is because we fought them to the negotiating table.”

With the Ministry of Defence (MoD) insisting there was no deal with the militias, the colonel’s remarks surprised observers. Neither the expletive nor any reference to negotiations featured in a follow-up interview the next morning.

Late last week the MoD finally admitted to having held talks with the militias. “We talk to the Mahdi Army and other militia groups in our area of operations as part of the strategy of political engagement we have long pursued,” it said.

“The Mahdi Army clearly have an interest in and an influence over Basra and the rest of Iraq, and an outright refusal to engage in dialogue with them would not be in Iraq’s, or Basra’s, best interests.” The Mahdi Army, led by the radical Shi’ite cleric Moqtada al-Sadr, put a different spin on the talks. “It was the British who came to us in the first place to strike a deal,” a senior official said.

“They wanted us to stop attacking their compounds and troops. It was not the Mahdi Army that went to them. It was obvious to us that they had suffered enough attacks and could not deal with more.”

Mahdi Army leaders had agreed to cease all attacks on two conditions, the official said. “First that they release our men and prisoners and then that they withdraw totally from Basra city itself.

“Eventually the British agreed to our demands and released nine Mahdi men, some of whom were senior commanders. They also promised to hand over the others to the Iraqi courts, which we know will not charge our men.”

While the demand that the troops withdraw from Basra merely reiterated previously announced British policy, the release of the prisoners has cast doubt over denials of a deal.

Whatever agreements were made – and further prisoners are expected to be released to mark the start of Ramadan this Thursday – the effect has been to keep Basra quiet.

The question now is whether this can be maintained for long enough to allow a handover of the whole of southern Iraq to the Iraqi authorities next month.

British commanders were elated last week by the success of the withdrawal from Basra Palace. However, in an echo of the recent criticism of the British, Frederick Kagan, of the American Enterprise Institute and one of the architects of the surge, said: “You’ve had a few quiet days, but it is too soon to tell.”

James Miller of the Center for a New American Security, and author of a report on how to withdraw from Iraq, said: “The pleasure the British feel is understandable, but the security situation in the south is still very difficult and we don’t know what the outcome will be.”

Gordon Brown is due to make a statement on Iraq to MPs when they return from the summer recess next month. The current plan is for the prime minister to announce “provincial Iraqi control” for the whole Basra region.

That is effectively already in place. The British troops have withdrawn to their barracks at the airport to mount “overwatch”, monitoring the Iraqis’ ability to control Basra.

As long as it stays quiet – an additional SAS squadron has been sent into the south to help ensure Iran does not destabilise the area – the British will cut their troops by half to around 2,500.

That will happen within months. Publicly, defence officials are saying that all being well, the cuts will come early next year. But a more likely starting point will be some time during the rotation of troops that will begin in a few weeks’ time and go on into December.

The key issue is what to do with the 2,500 or so troops left to mount overwatch. Brown has promised President George W Bush they will stay in place, monitoring the Iraqis’ performance for the foreseeable future.

Military commanders have insisted until now that they need at least the 5,000 troops they currently have at Basra airport just to defend themselves.

If the truce with the Mahdi Army continues, stationing 2,500 troops at the airport for overwatch will not be a problem. But no one is betting on that option and commanders would prefer to base the overwatch force in the safety of Kuwait.

Kuwait’s prime minister, Sheikh Nasser al-Mohammad al-Ahmad al-Sabah, played down that likelihood last week, telling the country’s An-Nahar newspaper there was no need for such a move. But UK officials said talks with Kuwait about basing more British troops there were continuing.

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