Radical cleric Moqtada Sadr says he will continue to oppose the occupation of Iraq by foreign forces and insists the new government lacks legitimacy. He said there would be no truce with those who co-operated with the US-led forces in Iraq, contradicting earlier conciliatory-sounding statements.

Hours later, the interim government postponed again the unveiling of a new security law to tackle the insurgency.

Mr Sadr had indicated his men would lay down their arms if offered an amnesty.

Correspondents say it is not clear what prompted Mr Sadr's reversal or the cancellation of the news conference.

The declaration came in a statement distributed by Mr Sadr's office in the Shia holy city of Najaf, where his Mehdi army battled US troops until a cease-fire in June.

"We pledge to the Iraqi people and the world to continue resisting oppression and occupation to our last drop of blood," the statement said.

"Resistance is a legitimate right and not a crime to be punished."