Iranian will negotiate with cleric

Italy rules out troop withdrawal, despite the execution of a hostage.
BAGHDAD, Iraq (AP) -- An Iranian envoy headed to Najaf today in a mission to work out a solution to the U.S. standoff with a radical Shiite cleric, an intervention by a nation Washington has tried to keep out of Iraqi affairs and a sign of the eagerness to avert a U.S. attack on the holy city.
Meanwhile, Iraqi militants executed an Italian hostage, the first captive known to have been killed among at least 22 foreigners kidnapped during Iraq's spasm of violence this month.
The militants who killed the Italian hostage demanded the withdrawal of U.S. forces from Iraq and threatened to kill three other hostages, the Arab TV network Al-Jazeera reported.
The Italian ambassador to Qatar, where the network is based, watched the video and confirmed the man killed was Fabrizio Quattrocchi, who had been kidnapped, Italian Foreign Minister Franco Frattini said.
No withdrawals
Italian Premier Silvio Berlusconi has ruled out any withdrawal of troops. "They have cut short a life. They have not damaged our values and our commitment to peace," he said.
The wave of kidnappings has sent a chill through the foreign community in Iraq, including aid workers, journalists and private contractors.
Some 150 Russians have fled the country so far in an evacuation called for by Moscow because of the abductions, said Dimitri Elen, a Russian Embassy diplomat in Baghdad. The Russian government is sending flights to evacuate around 553 Russians and 263 citizens of former Soviet republics.
The identity of the kidnappers -- apparently a variety of small groups -- has been unclear. A senior U.S. official said the military and coalition did not know who they were but suspected former intelligence officials from Saddam Hussein's regime or foreign militants were behind the abductions.
In the besieged city of Fallujah, U.S. warplanes struck guerrillas early today, the latest in nightly fighting that has strained a four-day truce called to allow Iraqi negotiators to try to end the violence.
Digging in
Marines and insurgents have been digging into their positions in houses inside the city, preparing for the possible complete collapse of the cease-fire. Insurgents were launching increasingly sophisticated attacks on Marine positions at night, Marine commanders said.
Two soldiers were killed Wednesday in attacks in Mosul and Samarra, in the north and center of the country, the military said. At least 89 U.S. soldiers have been killed this month -- making it the deadliest month for Americans ever in Iraq. More than 900 Iraqis have also been killed, the most since the fall of Saddam.
In an effort to keep the political process moving despite the violence, a top U.N. envoy proposed that an Iraqi caretaker government take power when U.S. officials hand over sovereignty on June 31.
Lakhdar Ibrahimi's plan would dump the current governing council and set up an executive made of highly respected Iraqis, including a prime minister, president and two vice presidents.
U.N. role
The plan, for the first time, would also give the United Nations a role in picking the new government, in contrast to the entirely U.S.-picked governing council, which many Iraqis dismiss as lackeys of Washington.
The executive would be chosen by the United Nations, the governing council, the coalition and a select group of Iraqi judges, according to the U.N. spokesman's office in New York. Party or ethnic affiliation would not be a factor in the choice, a distinct difference from the current council, carefully proportioned on ethnic lines.
Washington tried in the past to keep the political process almost solely between it and the Iraqis, but sharp differences over how to move forward forced it to give the United Nations a prominent role.
Now this month's intense violence was giving an entry for Iran into Iraq's affairs.
Delegation meets
An Iranian delegation, headed by senior Iranian Foreign Ministry official Hussein Sedeqi, met Wednesday evening with Massoud Barzani, current president of the Iraqi Governing Council.
The talks were "positive" and the Iranians expressed their willingness to mediate the U.S. dispute with radical Shiite cleric Muqtada al-Sadr, said council member Mahmoud Othman. The Iranians headed to Najaf today, an al-Sadr aide said.
Troops amassed
Some 2,500 U.S. troops are massed outside the southern town of Najaf, vowing to capture al-Sadr, located at his office next to the city's Imam Ali Shrine -- the holiest Shiite site in the world.
A U.S. assault into the city could enflame Iraq's Shiite majority and push them closer to al-Sadr, whose militia launched a bloody uprising last week against coalition forces across the south. It would also fan anti-American sentiment in Shiite communities around the world, including mostly Shiite Iran.
Iraq's top Shiite cleric, Grand Ayatollah Ali al-Husseini al-Sistani, persuaded al-Sadr to drop defiant demands he had put forward to Iraqi politicians currently mediating the standoff. Among other things, al-Sadr demanded U.S. troops withdraw from all Iraqi cities, a condition the U.S. military was unlikely to accept.
Al-Sadr militiamen in Najaf appeared to be preparing for a fight, moving into buildings and onto rooftops on Najaf's outskirts, said Col. Dana J.H. Pittard, head of the 2,500 U.S. troops amassed outside the city, ready to move in against al-Sadr.
"Najaf is a holy place," said Kaysal Hazali, spokesman for al-Sadr. "If they attack it, God knows the results: It is not going to be good for the occupation."