The tile walls of the holy shrine of Imam Ali in Najaf are riddled with bullets, the marble floors streaked with blood. Inside the gates of the besieged compound last week, members of Muqtada al-Sadr's Mahdi Army slept and patched up their wounds and died. But their determination never faltered, even under the withering firepower of the vastly superior army outside. Haidar, 23, had come to join the fight from his family's house just on the other side of the U.S. cordon encircling the shrine. "I was a history student, but now I have this," he said, waving aloft his Kalashnikov. He said he didn't expect to see his family again. A fighter in the shrine claimed to have seen a vision of the Imam Ali during a power blackout, and soon men sang and chanted and pointed to the balcony. They called for al-Sadr to make an appearance, but their leader never came.

No one is ever quite sure where al-Sadr stands. The rebellious Shi'ite cleric is a master of the mixed message, and last week he flipped so often between vows of violence and offers to negotiate that even when the two-week-old standoff between his Mahdi Army and combined U.S. and Iraqi-government forces seemed about to end, it wasn't clear if it had. Did he really intend to quit the shrine? Or was he actually planning to resume combat, as he later urged his followers, against the enemy forces still poised outside? As one of his spokesmen, Sheik Ahmed al-Shebani, put it, "Tomorrow I don't know what will happen. There could be war. There could be peace."

That's as good a summary as any of the state of play in Iraq today. Even if the battle for control of the mosque ends in al-Sadr's retreat, the struggle for control of the country is far from over. Resolution of the standoff in Najaf may help boost the legitimacy of the interim U.S.-backed government and its Prime Minister, Iyad Allawi, among Iraqis fed up with al-Sadr's truculence. And yet the renegade cleric still commands thousands of fervent followers willing to take up arms anytime at his order, and his strident defiance of the U.S. has won him an even greater number of noncombat supporters. Even an inconclusive truce boosts his stature: as long as the militant cleric gets away to fight another day, rebellion could erupt again.

That's the dilemma that vexes the U.S. and its allies as they try to quell the guerrilla campaign across Iraq that shows few signs of abating. U.S. commanders say they have inflicted punishing blows to al-Sadr's army; the military claims that hundreds of the cleric's fighters have been killed in the fighting in Najaf. But the fear of alienating peaceful Shi'ites forced the Allawi government to hold back from its threats to launch a decisive strike against rebels inside the shrine. And so late last week, even as al-Sadr claimed to be handing over the site to officials loyal to Grand Ayatullah Ali Husaini Sistani, al-Sadr's shock troops remained armed and in control of the streets surrounding it.

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