Shiite political parties emerged as the dominant force following the fall of the Sunni regime of Saddam Hussein. With many of the Shiite political elites in Baghdad coming to power in the post-Saddam era following years of exile in Iran, Tehran's growing political influence in Iraq puts the Western-backed government of Iraqi Prime Minister Nouri al-Maliki in the middle of the conflict between Iran and the United States.

U.S. officials in Iraq said the political situation in Iraq remained fluid and cautioned it was too early to make assessments regarding the future of the Mehdi Army, Sadr's fighters, and the politically influential cleric himself, The Wall Street Journal noted Monday.

The Iraqi government has shown a willingness to support U.S. claims of Iranian meddling in Iraqi affairs, but with Shiite factions emerging as the dominant force in Iraqi politics and considering the majority Shiite population in Iraq, allegiances in Baghdad are often duplicitous.

Fighting with forces loyal to Sadr erupted in late March following an Iraqi-led offensive on the southern port city of Basra.

Previous truce agreements faltered and U.S. military sources reported sporadic fighting in Sadr City as Iraqi government officials signed the formal cease-fire with Sadr loyalists Monday.