Clashes erupted overnight in Baghdad's Shia slum of Sadr City despite a deal to end seven weeks of fighting that have left hundreds of civilians and militants dead and many more wounded.

Residents of the impoverished neighbourhood expressed concern that the ceasefire agreed at the weekend by the Iraqi Government and the political wing of the Mahdi Army militia of Hojatoleslam Moqtada al-Sadr could easily unravel.

In separate incidents yesterday and overnight, US troops fired back at militiamen who launched attacks with rifles and rocket-propelled grenades. Three militants were killed, the military said.

The US military had said that it would scale back operations to see if gunmen obeyed the truce, but that troops would attack any militants who tried to launch an assault.

As part of the deal, Iraqi security forces are waiting to push further into Sadr City, home to some 2 million people, after a four-day pause to allow militants to surrender their heavy weapons and dig up roadside bombs. It remains to be seen whether the militiamen with comply.

One Mahdi Army commander told The Times that his fighters had no intention of disarming.

“We are not stupid,” said Abu Hussein, who commands a team of men armed with Kalashnikovs and rocket- propelled grenades. “If we give our big guns to the Iraqi Government then we will have no means to protect ourselves.”

Sadr City has been a war zone since late March, when US and Iraqi soldiers entered the southern quarter in an attempt to prevent militiamen from launching rockets at the fortified green zone. More than 1,000 rockets have been fired from Sadr City in that time, many of them raining down on the green zone, which houses the British and US embassies as well as Iraqi government buildings.

In retaliation, US and Iraqi forces are constructing a long wall to seal off the southern sector. The barrier is intended to restrict the movement of armed groups, but local people complain that it also cuts of commerce and prevents them from moving freely.

For families caught in the line of fire the past few weeks have been miserable and at times terrifying, as US aircraft pound suspected militia positions at all hours of the day and night, while militiamen plant roadside bombs in the street.

Sabeha Krimili, a fishmonger, said that the scariest moment for him was when militiamen shot three rockets from the back of a small bus outside his house. “They tried to shoot a fourth rocket when a helicopter targeted the bus, killing five militants as well as three children who had been in the street,” he said. His story could not be confirmed independently.

Abass al-Saedi, a cobbler, said that he had been unable to work for the first five days of the fighting. As a result, his wife and three small children had gone hungry because there was no money to buy food. “We need everything: food, money and medicine,” Mr Saedi said, voicing an appeal made by many.

The price of food has soared across Baghdad and particularly in Sadr City, where movement of goods in and out of the area is restricted.

After four days Iraqi security forces are expected to push further into Sadr City to deliver aid to families as well as search for weapons and impose the law in the area, said Tahseen al-Sheikhli, civilian spokesman for security in Baghdad. “After that we will take action according to what happens,” he said.

It is unclear whether the ceasefire will mark the end of hostilities. The US military blames the violence on criminal gangs and Iranian-backed groups that have broken away from the Mahdi Army and no longer follow Hojatoleslam al-Sadr.

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