"The two sides have promised to commit to the agreement. The first phase involves a six-hour ceasefire between 10:00 am and 4:00 pm today Sunday," a senior member of the Iraqi Islamic Party, Hatem al-Husseini, told AFP.

"After that, a second phase will start with the progressive pullout of the marines from Fallujah and the deployment of Iraqi police and Iraqi Civil Defence Corps (ICDC) to take over," he added.

Husseini said he met with top US civil administrator Paul Bremer Saturday at around 10:30 pm (1830 GMT), upon his return from mediation talks in Fallujah, west of Baghdad.

"I cannot disclose the conditions of the negotiations because it would be counter-productive. We will talk about that when we complete this process," he said.

"But we are very, very optimistic," he said, adding: "Minutes ago, I was just on the phone with Fallujah, and they told me that the situation was calm and they said that the night was also relatively calm."

"They said that hospitals in Fallujah did not receive anyone injured last night," he said.

Sporadic fire had continued hours before the ceasefire was expected to go into effect.

A senior coalition spokesman had no comment on the negotiations but a statement was to be issued later Sunday.

Lieutenant Colonel Brennan Byrne, the commander of the 1st Battalion of the 5th Marine Regiment in Fallujah, said early Sunday the marines maintained the suspension of operations order on Saturday to facilitate mediation talks.

But he said marines were ready to retaliate when in danger.

Hundreds of Iraqis have been killed since the marines launched on Monday the offensive against Fallujah after four American contractors were brutally killed in the city last week.

WAR.WIRE