NAJAF, Iraq - U.S. armored vehicles and tanks rolled back into the streets of Najaf and troops battled Shiite militants in a vast cemetery Sunday in a resumption of fighting after the collapse of negotiations aimed at ending the standoff in this holy city.

The collapse of the ceasefire in Najaf came as more than a thousand delegates from across Iraq opened a National Conference in Baghdad seen as key to establishing democracy in the country.

Hours after the conference opened, insurgents fired a barrage of mortars that hit a commuter bus station in central Baghdad, scattering shards of glass, shrapnel and blood.

There were contradictory reports of death tolls. Police Lt. Yasser Fawaz, who was at the scene, said about 10 people were killed and about 15 others injured. Interior Ministry spokesman Col. Adnan Abdulrahman said the attack killed one person and injured five others.

The conference aims ultimately to give a broader spectrum of Iraqis a voice in the political process and increase the legitimacy of the interim government of Prime Minister Ayad Allawi, which is dependent on American troops and money even after the end of the U.S. occupation.

But the failure to put an end to uprising in the south by followers of radical Shiite cleric Muqtada al-Sadr - along with the continued Sunni-led insurgency elsewhere - threatens to undermine the conference.

Explosions and gunfire rattled through Najaf, south of Baghdad, on Sunday afternoon in new clashes that appeared centered on the huge cemetery where al-Sadr' Mahdi Army militia has been hiding out and fighting running gunbattles with U.S. forces amid the tombs since the violence broke out here Aug. 5.

An explosion, believed to be from a tank round, landed near the outer wall of the compound housing the revered Imam Ali Shrine, the militants' informal headquarters and the holiest Shiite site, said Ahmed al-Shaibany, an aide to militant Shiite cleric Muqtada al-Sadr.

"The shrine was not hit," al-Shaibany said.

In the morning, U.S. tanks moved toward the center of town and U.S. military vehicles were seen patrolling the city, which had been quiet since Friday as government officials and the militants tried to negotiate a solution to the crisis.

Government negotiators said Saturday the three days of talks had been fruitless, but al-Sadr representatives said the sides had agreed on a cease-fire deal before Allawi personally intervened to quash it.

The mortar barrage in Baghdad appeared to target the Green Zone, the fortified enclave where the National Conference opened hours earlier, but hit the station by mistake.

About 1,300 religious, political and civic leaders gathered for the unprecedented three-day meeting to discuss political issues and help choose a 100-member national council meant to serve as a watchdog over the country's interim government before elections scheduled for January.

"This conference is not the end of the road for us, it is the first step ... to open up horizons of dialogue," Allawi told the delegates. "Your blessed gathering here is a challenge to the forces of evil and tyranny that want to destroy this country."

Some 70 factions are participating in the conference, though several are boycotting it - including al-Sadr's movement. The goal of the council that the gathering will create is to make Iraqis of all political and religious groups feel they have a voice in the government as the country struggles to enact democratic reforms.

"The challenge before you is great," U.N. envoy Ashraf Jehangir Qazi told the delegates. "But these are things you can and will achieve."

But the Najaf violence, which has angered many in Iraq's Shiite majority against the government, cast a pall from the start.

After the opening speeches, Nadim al Jadari, an official with the Shiite Political Council, ran onto the platform and threatened to quit the conference - which would be a painful blow to the government - unless negotiations were restarted to end the fighting in Najaf.

In an attempt to assuage the complaints, a working committe was formed to find a peaceful solution to the tension in Najaf.

At least 30 people were part of the committee, said delegate Saad Qindeel, from the Supreme Council for the Islamic Revolution of Iraq, the country's largest religious group.

"All kinds, all colors, Shiite and Sunni, they're all involved in this," he said.

On Saturday, about 10,000 demonstrators from as far away as Baghdad arrived in Najaf to show their solidarity with the militants and act as human shields to protect the city and the holy Imam Ali shrine, where the militants have taken refuge since the fighting started.

Before the renewed violence Sunday, Mahdi Army militiamen were seen patrolling the streets of Najaf's Old City. Police officials warned journalists to leave the city, saying they had intelligence a car bomb might be sent to target them.

During the negotiations, al-Sadr demanded a U.S. withdrawal from Najaf, the freeing of all Mahdi Army fighters in detention and amnesty for all the fighters in exchange for disarming his followers and pulling them out of the shrine and Najaf's old city, aides said.

But on Saturday, Iraq's National Security Adviser Mouwaffaq al-Rubaie announced the talks were over, saying, "After three days, my government thought there was no use in continuing."

However, Qais al-Khazali, al-Sadr's spokesman in Najaf, said a deal had been reached and al-Sadr - who was not in the talks himself - had signed it, when "we were surprised that they (the government negotiators) got instructions from Dr. Allawi to leave."

The U.S. military estimates hundreds of insurgents have been killed since the clashes broke, but the militants dispute the figure. Six Americans have been killed, along with about 20 Iraqi officers, it said.

In other violence Sunday, a Ukrainian patrol commander, Capt. Yuriy Ivanov, was killed in a land mine explosion near Suwayrah, 25 miles south of Baghdad, said Lt. Col. Artur Domanski, a Polish military spokesman.

Also, a 29-year-old Dutch military policeman was shot dead and five others seriously wounded during violence Saturday in Rumaythah in the southern al-Muthana province, the Dutch Defense Ministry said Sunday.

In a separate incident in Rumaythah, al-Sadr militants fought with police in a battle that killed two people, including one policeman, said Dr. Mohammed al-Kharasani, a hospital official.

On Sunday afternoon, U.S. jet fighters bombed the volatile city of Fallujah, witnesses said. There were no immediate reports of injuries.

© Copyright 2004 Associated Press

###