After a week of heavy fighting between US-led coalition forces and Iraqi insurgents, a fragile ceasefire still holds. Ramsey Al-Rikabi reports from Baghdad As the dust settled after almost two weeks of the worst violence to hit Iraq since the end of the war that toppled Saddam Hussein's regime last year, the occupation authorities in Baghdad, as well as the people of Iraq, emerged tested as never before. The biggest items of the agenda of post-war Iraq -- security and the birth of a new political order -- weathered the test poorly. Negotiations, instead of overwhelming force, now seem to be the way forward for the coalition. Modest improvements have been witnessed as a cease-fire between militants and US Marines in Falluja seems to be holding and Al-Mehdi Army, a militia loyal to radical Shia cleric Muqtada Al-Sadr, has begun evacuating police stations and government buildings it had seized in the southern part of the country. Fighting in the Sunni resistance stronghold of Falluja trailed off over the weekend as coalition military commanders declared an end to offensive operations in the city. US Marines sealed off and entered the town in search of insurgents responsible for the gruesome killing of four American civilian contractors last month. The coalition quickly drew sharp criticism for the operation as civilian casualties mounted alarmingly. Some reports have put the number as high as 600 -- mostly women, children and elderly. "Houses are being destroyed, people are dying. There is a lot of sympathy for the people of Falluja," said Mahmoud Othman, a member of the US-appointed Interim Governing Council (IGC). Tens of thousands fled the city, only to be stopped on its outskirts, hindered from moving on by security blockades of the main roads to and from the city. By Monday, military commanders declared a "unilateral cessation of hostilities" to allow an Iraqi negotiating team opportunity to enter the city and work out a plan to end the siege. The cease-fire offered a chance to the residents of Falluja to obtain food and medical supplies, as well as bury their dead. Reports said a football pitch was being used as a makeshift graveyard. Meanwhile, occupation authorities say they are regaining ground lost last week to Al- Mehdi. General Mark Kimmet, spokesman for the military command in Iraq, said on Monday that coalition forces had re-asserted control in the south-central Iraqi cities of Kut, Diwaniya and Nasseriya. Al-Sadr's Al-Mehdi militia had driven coalition and Iraqi security forces out of these and other cities, including the holy cities of Karbala and Najaf, and the nearby city of Kufa. No offensive operations were undertaken by the coalition in Karbala and Najaf as over a million Shia celebrated the holy day of Arbayeen, which brings to a close the 40 days of mourning in commemoration of the death of Imam Hussein, grandson of the Prophet Mohamed. Although coalition officials deny any knowledge of negotiations with Al-Sadr, members of the IGC say mediators have been in contact with Al-Sadr's people in Najaf. The Associated Press reported on Tuesday that Al-Sadr had agreed to pull some of his forces out of Najaf, although he has refused to disband the militia. "The mission of US forces is to kill or capture Muqtada Al-Sadr," said US Army General Ricardo Sanchez, who is in overall command of coalition forces in Iraq, during a briefing Monday night. "The people we're fighting, whether they're in Falluja or whether it's Muqtada Al-Sadr's mob, are basically anti-democratic forces, and they are now in the process of coming out like a poison that's been there for a long time in the body, and we're going to have to deal with it," Paul Bremer, the US chief administrator in Iraq, told the American television network ABC. The coalition forces were disappointed by the performance of the hastily trained Iraqi security forces who fled without a fight as Al- Sadr's militia overran police stations and government buildings across southern Iraq. Some Iraqi police even collaborated with Al-Mehdi and militiamen were seen driving around in newly painted blue and white Iraqi police cars, some sporting police body armour. In Falluja, a brigade of the new Iraqi army refused to fight against Sunni militants. General Sanchez acknowledged the shortcomings of local security forces. "We knew that there were going to be some risks that we were taking by standing up security forces quickly, and we also know that it's going to take us a while to stand up reliable forces that can accept responsibility for both the internal and the external security of the country," he said. The position of Iraqi security forces was complicated last week when, as many claim, Iraqi police were faced with an uprising that included friends, neighbours and relatives. In a briefing on Sunday, US commander for the region General John Abizaid attempted to shift blame for the chaotic security situation away from the US. "The solution to Iraq's security problems does not lie with the US armed forces but with the people of Iraq," Abizaid said. On Sunday, a US Apache helicopter was shot down west of Baghdad, killing the two crew members on board. The attack took place near the main highway heading west to Falluja, recently the scene of intense fighting between Marines and Sunni insurgents. The highways west and south of the capital have been the scene of several attacks on coalition supply convoys in the last week. The burned out remains of tanker trucks and lorries litter the highways in an increasingly lawless region outside Baghdad. Another new tactic by insurgents, with the goal of splintering the coalition, has been to kidnap foreigners. Seven Chinese were abducted on Sunday on their way into Iraq from Jordan, though released Monday -- they may have been mistaken for South Koreans or Japanese, countries that have a troop presence in Iraq. At least 30 foreigners have been abducted in Iraq recently, a handful of which have been shown in videotapes in the company of well armed, masked men. Many have been subsequently released, including seven South Korean missionaries captured last week and a British citizen. A group of foreign truck drivers was also released, including three from Pakistan, two from Turkey and one each from India, Nepal and the Philippines. US officials announced that at least nine Americans, seven of them civilian employees and the other two soldiers, have been abducted. Two Germans missing since Saturday are believed to be dead. By far the most publicised kidnapping has been that of three Japanese -- two men and one woman -- who were seen on video released by their captors blindfolded and threatened with knives. Three Czech journalists and eight Russians were also abducted. The Russians were released Tuesday. The US-led coalition found themselves in a nightmarish scenario earlier this month: trying to root out a tenacious Sunni resistance movement while trying to put down what threatened to become a full scale Shia uprising. The first ripples of trouble began late last month, later swelling into clashes across western and southern Iraq that has so far left 70 coalition soldiers, and at least 700 Iraqis, dead. Resistance to the occupation in the Anbar province of western Iraq -- in the so-called Sunni triangle -- is nothing new. The largest town in the region, Falluja, has been a virtual no-go zone since late April 2003, after US forces killed 17 protesters. Although Falluja has since then been considered the primary hotbed of anti- American sentiment in the country, matters grew even worse when four civilian contractors were killed and their bodies mutilated. Coalition officials vowed to retaliate against the intransigent rebels of Falluja. Also late last month, the coalition decided to shut down the Al-Hawza newspaper, the mouthpiece of Muqtada Al-Sadr, and then less than a week later arrested one of his deputies. Protests turned violent and quickly turned into a widespread uprising by Al-Mehdi militiamen. The timing of the two coalition actions, while coincidental, could not have been worse. The coalition is now opting for political solutions to the conflicts they found themselves in with both Shia and Sunnis. It was unfortunate that it took some of the most ferocious fighting and the highest death toll since the end of the war last year to get the point. Coalition officials here say they had to face down threats from Sunni insurgents and Shia militias now rather than after the handover of sovereignty at the end of June. It remains to be seen if they succeeded or radically failed.