Iraq's Maliki says he'll fight militia to the end

By Aref Mohammed

BASRA, Iraq (Reuters) - Iraq's U.S.-backed Prime Minister Nuri al-Maliki vowed on Thursday that security forces would battle Shi'ite militia in Basra "to the end", despite huge demonstrations to demand his resignation.

Mehdi Army fighters loyal to cleric Moqtada al-Sadr remained in control of much of Basra, Iraq's second biggest city and main oil hub, defying a three-day government offensive that has led to violence spreading across the south and Baghdad.

Authorities imposed a three-day curfew in the capital to contain the clashes.

Saboteurs blew up one of Iraq's two main oil export pipelines from Basra, cutting at least a third of the exports from the southern oilfields, a Southern Oil Company official said. U.S. oil prices briefly rose more than $1 a barrel.

Maliki, who has traveled to Basra to oversee the crackdown, told tribal leaders it was sending "a message to all gangs that the state is in charge of the country".

"We entered this battle with determination and we will continue to the end. No retreat. No talks. No negotiations."

Sadr has called for talks. Late on Thursday he issued a statement saying: "We ask everyone to adopt the political resolution and peaceful protest. Do not shed Iraqi blood."

More than 130 people have been killed and hundreds wounded since the government began its offensive on Tuesday, exposing deep divisions between powerful factions within Iraq's majority Shi'ite community.

The clashes have all but wrecked a truce declared last August by Sadr, which Washington had said helped curb violence.

The government says it is fighting "outlaws", but Sadr's followers say political parties in Maliki's government are using military force to marginalize their rivals ahead of local elections due by October.

U.S. President George W. Bush praised Maliki's "boldness" in launching the operation and said it showed the Iraqi leader's commitment to "enforce the law in an even-handed manner".

Tens of thousands of Sadr supporters marched in Baghdad in a massive show of force for the cleric, demanding Maliki's removal. In the vast Sadr City slum, named after the cleric's slain father, crowds of angry men chanted slogans.

"We demand the downfall of the Maliki government. It does not represent the people. It represents Bush and Cheney," marcher Hussein Abu Ali said.

The slum of 2 million people is in a virtual state of siege.

"We are trapped in our homes with no water or electricity since yesterday. We can't bathe our children or wash our clothes," said a resident who gave his name as Mohammed.