Radical Shiite cleric Moqtada al-Sadr has rejected Iraqi government's demands to end his rebellion, his spokesman said on Thursday.

"It is very clear that we reject them," Sheikh Ahmed al-Sheibani told reporters inside the Imam Ali shrine.

Fierce fighting erupted in Najaf shortly after Sadr's rejection to surrender.

Earlier, Iraqi Minister of State Qassem Dawoud said that an attack against militants loyal to Sadr in Najaf would be launched within hours unless Sadr meets demands laid down by the interim government.

Sadr's Mehdi Army and US-backed Iraqi forces have been locked in fierce fighting for more than two weeks, and the Iraqi government on Thursday accused Sadr of failing to act on a promise to disarm and abandon his stronghold in Najaf.

Explosions shake Najaf

Explosions shook the Old City of Iraq's Najaf while suspected US AC-130 gunships pounded positions held by Sh'ite militiamen in the holy city late Thursday, witnesses said.

The intensive shelling took place hours after interim Prime Minister Ayad Allawi issued a final call to militants loyal to Shiite cleric Muqtada al-Sadr to drop their arms and give up their fight there.

Large orange multiple flashes lit the night sky, said the witnesses, adding a large cloud of smoke was rising from an ancient cemetery where Sadr militiamen have fought US troops for two weeks.

Iraqi interim Prime Minister Iyad Allawi earlier on Thursday issued a "final call" to radical Shiite cleric Moqtada al-Sadr's militia to disarm and pull out of the Imam Ali Shrine.

"This is the final call for them to disarm, vacate the holy shrine and engage in political work and take into account the interests of our homeland," Allawi told a news conference held in Baghdad.

Iraqi Minister of State Qassem Dawoud noted that an attack against militants loyal to Sadr in Najaf would be launched within hours unless Sadr meets demands laid down by the interim government.

Sadr has rejected Iraqi government's demands to end his rebellion and one of Sadr's aides claimed that they would be happy to die as martyrs.

(Xinhua News Agency August 20, 2004)