Details from a secret meeting between top Iranian and Iraqi officials signal Iran's aim to 'stop arming' militias.
At least 47 US soldiers were killed in Iraq in April, making it the deadliest month since September. Many of the casualties are a result of the recent assault on the Mahdi Army.
Bombings this week in Sunni areas of Iraqi have killed more than 100 people.
Battles continued to rage Sunday between the radical cleric's Mahdi Army and Iraqi and US forces.
Residents of Baghdad's Shiite slum fear violence in Basra between the Mahdi Army and Iraqi forces will spread to Baghdad.
Prime Minister Nouri al-Maliki has vowed to capitalize on security gains to revive the political process in the coming year.