Iraq's radical Shi'ite cleric Moqtada al-Sadr has ordered his Mahdi Army militia to freeze all activities for six months.
An aide to al-Sadr says the suspension includes armed activities.
Iraqi security officials say gunmen loyal to al-Sadr took part in Tuesday's violence in the Shi'ite holy city of Karbala, when 52 people were killed in clashes.
The Mahdi militia has denied it was involved.
Iraqi Prime Minister Nour al-Maliki visited Karbala Wednesday and said order has been restored to the city.
Also Wednesday, Iran protested the U.S. military's brief detention of eight Iranians in Baghdad.
The U.S. military said the Iranians, including two with diplomatic passports, and seven Iraqis were detained after U.S. troops found they were carrying weapons without permits.
An aide to the top U.S. commander in Iraq called the incident "regrettable."
In Karbala, Mr. Maliki blamed the fighting on armed criminal gangs and remnants of the former regime of Saddam Hussein.
A U.S. military commander in Iraq said earlier this month that the Mahdi Army militia had fractured, and some divisions are operating outside of al-Sadr's control.
In other news, the U.S. military says an American soldier died of wounds sustained Tuesday during combat near the northern city of Kirkuk.
The military also says troops killed two suspected terrorists and detained 22 others in central and northern Iraq Wednesday in raids targeting networks of al-Qaida in Iraq.
Some information for this report provided by AP, AFP and Reuters.