Saying, "I am an enemy of America and America is my enemy until the day of the last judgement," he rejected calls by interim Prime Minister Iyad Allawi for his men to lay down their arms and leave the Shia holy city.

"I will defend Najaf until my last drop of blood," Sadr told a news conference in the revered Imam Ali shrine, which has remained a stronghold of Sadr's Mehdi Army since his spring uprising against foreign troops in Iraq.

"The occupiers must go, and then the democratic process can start" in Iraq," said Sadr. "I will stay here to support the fighters and I call on all religious dignitaries to do the same."

Sadr was speaking the day after Allawi told the mili|ia to give up and leave Najaf on a surprise visit to the city.

He also rejected an earlier invitation by the prime minister to run in elections scheduled for early next year.

Sadr said those who wanted to go could do so, he was not forcing anyone to resist, adding, "Those who have forced us to fight are the occupiers of our country."

And he dismissed any participation in politics until Iraq "is free and independent."

Sadr s|rongly denied that his forces included any foreign fighters who had infiltrated Iraq and reached Najaf.

"That is false, those who are fighting in Najaf are defending islam, defending religion and defending the holy city," he said.

He called on the Iraqi police and army not to fight aginst their "brothers" and the Baghdad government to be "on the side of the people and not use the same weapons as Saddam Hussein', the former dictator ousted by invading US-led forces last year. "I would rather see America drop an atomic bomb than a policeman fire one bullet" on the Shia militia, he added.

Asked about negotiations to end the fighting, Sadr demanded, "What negotiations can there be when the ar and bombardments continue?"

"We cannot mix democracy and occupation," he said. "Let us finish with the occupation."

Heavy fighting Monday again rocked Najaf, where clashes between Iraqi security forces, backed by US marines, and Mehdi militiamen are feared to have left hundreds dead since last Thursday.

Artillery and tank fire, backed by air power, battered the cen|re of the city. Mehdi Army fighters were still hunkered down in positions near the Imam Ali shrine and the vast Najaf cemetery.