"I went today to university and it felt to me like a new fresh day in my life after two weeks of being isolated from the world," said law student Ahmed Kadhim.
But Nadeem Qasim, a civil servant in the water department, said he would not be optimistic "as long as the Iraqi army vehicles are still there and U.S. planes hover over the city. It means the problems and bombardment may resume".
LOUDSPEAKERS
As the fighting raged overnight, loudspeakers on mosques blared out speeches in support of Sadr's Mehdi Army fighters.
"We will not allow the Americans to enter the city whatever happens, if we lose our lives and our sons," they called out.
A Reuters correspondent who spent the night inside Sadr City said U.S. helicopters and jets flew overhead before midnight and several of the aircraft could be seen firing missiles.
The sound of heavy gunfire erupted in several parts of the slum, and fighters could be seen on the streets carrying rocket-propelled grenades and machine guns into battle.
Hundreds have died in clashes between Sadr's followers and U.S. and Iraqi forces since late last month, when Prime Minister Nuri al-Maliki launched a crackdown against the militia in the southern city of Basra.
U.S. Defence Secretary Robert Gates said Sadr would not be treated as an enemy if he played a peaceful political role.
"Those who are prepared to work within the political process in Iraq, and peacefully, are not enemies of the United States," Gates told reporters at the Pentagon on Friday.
A top aide to Sadr, related to the cleric by marriage, was shot dead in the Shi'ite holy city of Najaf on Friday.
Assassinations have been a frequent part of the power struggle between Shi'ite groups in southern Iraq, but the slaying of someone so close to the cleric could increase tension. Police imposed a curfew in Najaf, and a Reuters correspondent in the city said it was quiet on Saturday.
