NAJAF, Iraq - Shiite militants bombarded a Najaf police station with mortars today, killing seven policemen and wounding 31 people after a Cabinet minister issued an ultimatum to the militants to disarm immediately or face a massive offensive by Iraqi forces.

Radical Shiite cleric Muqtada al-Sadr, however, rejected the demands, according to an aide.

Haidar al-Tourfi, an official at al-Sadr office's office in Najaf, said he received a text message from al-Sadr rejecting the demands.

"Either martyrdom or victory," the message said, according to al-Tourfi.

The violent clashes that have wracked the Shiite holy city of Najaf for weeks persisted today, with explosions and gunfire ringing through the streets and black smoke rising over the center of the city.

The ultimatum by Minister of State Qassim Dawoud came a day after al-Sadr conditionally agreed to a peace deal to end two weeks of fighting that pitted U.S. and Iraqi troops against his al-Mahdi militia forces, who are holed up in the revered Imam Ali shrine in Najaf.

The mortar barrage slammed into a police station in the center of Najaf. The police station, which is not near the Imam Ali shrine, has been the frequent target of attacks from militants loyal to al-Sadr.

After the attack, a police force raided a local hotel where journalists were staying, saying they suspected some of the reporters helped the attackers locate the police station.

Explosions and gunfire could be heard throughout Najaf. Three U.S. tanks and two Humvees were parked about 400 yards from the shrine, about as close as U.S. forces have come to the Imam Ali shrine during the fighting.

Fighters from the Mahdi Army militia could be seen manning positions in narrow alleys of the Old City and outside the shrine compound. A clock on the compound's outer wall, reportedly hit by shrapnel, was smoldering.

Late Wednesday, al-Sadr sent a letter to Iraq's national conference gathering saying he would accept its peace plan to put down his arms, withdraw from the shrine and turn to politics in exchange for amnesty for his fighters. However, he wanted an end to the fighting before he complied and he wanted to negotiate how the plan would be implemented, his aides said.

The government today demanded he comply without any conditions.

Wednesday's cease-fire agreement was announced at the National Conference in Baghdad, which had sent a delegation to negotiate with al-Sadr.

The four-day conference, a gathering of more than 1,000 prominent Iraqis, was seen as an important milestone on the country's path to democracy.

It ended Wednesday with the selection of 81 members of a new National Council. The council, to sit next month, is supposed to act as a watchdog over the interim government until January elections.

The standoff in Najaf has increasingly infuriated the government, and Wednesday afternoon Iraqi Defense Minister Hazem Shaalan said he could send Iraqi forces to raid the shrine within hours. Prime Minister Ayad Allawi issued a statement accusing the militants of mining the area around the shrine.

The U.S. military says the clashes have killed hundreds of militants, though the militants deny that. Nine U.S. troops and at least 40 Iraqi police have been killed as well.

Clashes also have spread to Baghdad.

An Army spokesman said today that one soldier died when attackers fired on a U.S. patrol Wednesday in the east Baghdad neighborhood of Sadr City. The area has been the scene of ongoing firefights between U.S. forces and al-Sadr's supporters, said Maj. Philip Smith. Another soldier was killed while patrolling the same area hours earlier, Smith said.

Two Marines assigned to the 1st Marine Expeditionary Force were also killed Wednesday, the military said today. One Marine was killed while conducting "security and stability operations" in Najaf, and the other died in a vehicle accident in Anbar province west of Baghdad.

As of Wednesday, 946 U.S. service members have died since the beginning of military operations in Iraq in March 2003, according to the U.S. Defense Department.