Moves to end the siege, which drew strong criticism internationally and from America's Iraqi allies, began despite a suicide car bombing that killed two Marines and wounded six at a garrison on the outskirts of the city. U.S. officials provided no further details on the attack.
The plan for Fallujah's security marked a shift in the U.S. strategy which had marginalized former members of Saddam's Baath Party and abolished the Iraqi army last year. The commander of the new Fallujah Brigade, Maj. Gen. Jassim Mohammed Saleh, once served in Saddam's Republican Guard. He arrived in this besieged city Friday wearing his old uniform to the cheers of bystanders.
Negotiations were also taking place in the southern city of Najaf, where tribal leaders and police discussed a proposal to end a standoff between soldiers and militiamen loyal to radical Shiite cleric Muqtada al-Sadr.
In a sermon, al-Sadr remained defiant, saying he rejected "any appeasement with the occupation." Still, mediators said al-Sadr and U.S. officials agreed to a truce due to last through Sunday.
In other developments:
Elsewhere, an Iraqi police colonel, Ahmad al-Khazraji, was shot dead Thursday night in downtown Baghdad, the U.S. command said Friday. The body of a Baghdad area council member was found hung with a sign on his chest that said "al-Mahdi Army business," a reference to al-Sadr's militia.
Convoys of U.S. troops and equipment could be seen heading out of parts of Fallujah, replaced by red-bereted Iraqi troopers. Residents said that by Friday evening, U.S. troops had left several neighborhoods that had been the scene of heavy fighting, including Nazzal, Shuhada, Nueimiyah and the industrial area. As U.S. Marines withdrew, Iraqi police and civil defense units moved in.
In Baghdad, Brig. Gen. Mark Kimmitt, coalition deputy operations chief, insisted the Marines were not withdrawing from Fallujah, one of the most hostile cities in the tense Sunni Triangle, but were simply "repositioning." He insisted the Marines would maintain a strong presence "in and around Fallujah."
"The coalition objectives remain unchanged — to eliminate armed groups, collect and positively control all heavy weapons and turn over foreign fighters and disarm anti-Iraqi insurgents in Fallujah," Kimmitt said.
Asked if the Marines were leaving Fallujah, Kimmitt replied: "Nothing could be further from the truth."
Nevertheless, the move appeared aimed at reducing the American profile at a time of growing opposition among Iraqis to the U.S.-led occupation. The deal was announced at the end of the bloodiest month for American forces — and for Iraqis as well — since President George W. Bush launched the Iraq war in March 2003. At least 136 U.S. troops died in April.
Under the plan, a force of 600 to 1,100 Iraqis, many of them former soldiers from the Fallujah area, would be used initially to man checkpoints around the city. Marines will remain on or near the city's perimeter and plan at a later stage to conduct their own patrols inside the city, a Pentagon official said on condition of anonymity.
Gen. John Abizaid, chief of U.S. military operations in the Middle East, told reporters at the Pentagon that the United States was sticking by most of the objectives it outlined when the Marines stormed Fallujah on April 5 — mainly to seize the men who brutally killed four American contractors. But Abizaid conceded that the killers had probably already fled the city.
He seemed to soften on previous demands that the guerrillas hand over foreign fighters and heavy weapons to U.S. forces.
"Clearly we will not tolerate the presence of foreign fighters," Abizaid said. "We will insist on the heavy weapons coming off the streets. We want the Marines to have freedom of maneuver along with the Iraqi security forces."
Foreign fighters, too, may have fled the city, a top U.S. military official in Baghdad said on Thursday. Others question whether many foreign fighters had ever joined the battle in Fallujah, characterizing it instead as a homegrown uprising. And weapons coming "off the streets" appears to be a softening of the previous demands to "turn over" heavy weapons to the Marines.
Kimmitt said he had no information on Saleh's background, but that the commander had been vetted by the Marines who had full confidence in him. A former general in the Iraqi army, Mohammed al-Askari, said Saleh served in the Republican Guards in the 1980s. He later commanded an Iraqi army division and headed the army's infantry forces.
"Fallujah residents have chosen Maj. Gen. Jassim Mohammed Saleh to form and lead a unit that will be in charge of protecting the city," said Iraqi Brig. Gen. Shakir al-Janabi, who expects to be part of the new force. "Our force will handle the security issue today in cooperation with Iraqi police."
The chief of Fallujah's hospital, Rafie al-Issawi, said at least 731 Iraqis, many of them civilians, were killed since the siege began on April 5. But earlier figures were disputed by Iraq's health ministry and an exact toll was not known. At least 10 Marines have died during the siege.
Ten U.S. soldiers and a South African civilian were killed in attacks elsewhere in Iraq on Thursday, including eight Americans who died when a bomb hit as they tried to clear explosives from a road south of Baghdad.
Friday's American deaths raised to 128 the number of U.S. troops killed in combat in April, the bloodiest month for U.S. forces in Iraq.
At least 738 U.S. troops have died in Iraq since the war began in March 2003. Up to 1,200 Iraqis also have been killed this month.
In Najaf, negotiations continued in to end the standoff with militiamen loyal to al-Sadr.
Ahmed Shaybani, a spokesman for al-Sadr, told The Associated Press that talks were under way between Najaf police and tribal leaders. He said a proposal emerged under which al-Sadr followers would hand over security to the Najaf police and Sadr's Mahdi army would leave the city.
Shaybani said the proposal would be accepted if the Americans agreed not to enter Najaf and did not act in a hostile way toward its holy sites. Al-Sadr would remain in the city.