Explosions and heavy machine gun fire rocked Najaf neighborhoods for hours, and bands of militiamen with assault rifles, rocket-propelled grenades and mortar tubes roamed the city of dun-colored buildings. Smoke billowed from blasted buildings.
Civilians scurried for cover, leaving many streets empty as the call for Friday prayers rose from loudspeakers at mosques. Some families left their homes on foot to seek refuge.
The U.S. attack represented a strongest U.S. push yet against al-Sadr, whose forces fought intense battles with American forces this week in another holy city, Karbala.
The intensifying battles have eclipsed efforts by Iraqi political and tribal leaders to seek a peaceful solution to the confrontation ahead of a planned transfer of sovereignty to Iraqis on June 30.
In other developments:
"We will work with you," Deputy Defense Secretary Paul Wolfowitz told the Senate Armed Services Committee on Thursday.
Mr. Bush sent lawmakers his formal request for the $25 billion on Wednesday, the first portion of 2005 spending that Wolfowitz said would surpass $50 billion.
Much of the fighting in Najaf happened in the city's vast cemetery, a maze of footpaths and tombs that offers ample hiding space for militiamen armed with automatic rifles and rocket-propelled grenades. Several tanks rumbled into the cemetery, known as the "Valley of Peace" and thought to be the world's largest.
American troops moved along main roads in the city near the Imam Ali shrine, one of the holiest sites in Shia Islam. U.S. helicopters and a jet fighter flew over the city.
The American incursion was the deepest yet into Najaf, and U.S. soldiers also appeared to have cut off the main road between Najaf and nearby Kufa, where al-Sadr routinely delivers a Friday sermon.
Al-Sadr, who faces an arrest warrant in the murder of a moderate rival cleric in April 2003, delivered a sermon at Friday prayers in Kufa, another holy city that lies six miles to the northeast of Najaf.
Al-Sadr described President Bush and British Prime Minister Tony Blair as "the heads of tyranny."
The cleric also condemned Iraqis who cooperate with the Americans and "are willing to execute the occupiers' orders," and called for an end to sectarian tensions among Iraqis.
Residents reported explosions and gunfire in Karbala on Friday.
On Thursday, Muslim clerics and political leaders in Karbala named Shakir Abdul-Amir, a former major general in Saddam's army, to mediate an end to the fighting. U.S. officials have said they would welcome Iraqis who wanted to resolve the conflict with al-Sadr peacefully, but there was no indication that such negotiating efforts were yielding results.
Al-Sadr's militia became a major problem for the United States in early April, when his fighters swept across the Shiite heartland south of Baghdad, capturing police stations and government buildings.
The U.S. military now says it regrets missing an opportunity to collar al-Sadr in October, when intelligence emerged that his militia was stockpiling weapons.
"In retrospect, we should have found a way to arrest him, detain him, capture him," Dempsey Maj. Gen. Martin Dempsey, commander of the Army's 1st Armored Division. "We chose not to. The advice we were given was to allow Iraqis to solve this problem. They were going to marginalize him. But he didn't become marginalized."
The young cleric's confrontational tactics have exasperated moderate Shiites who want an end to the fighting.
Still, al-Sadr has the support of thousands of mainly poor, urban Shiites and he has capitalized on hostility toward the coalition that escalated after revelations of abuse of Iraqi prisoners by U.S. soldiers.
But the al-Mahdi Army is seriously weakened after five weeks of skirmishing, Dempsey said.