BAGHDAD — The U.S. military expressed hope Sunday for a diplomatic solution to seven weeks of fighting in Baghdad's Sadr City as a fragile cease-fire settled over the Shiite slum that houses nearly half the capital's 6 million people.

No violence was reported as gunmen withdrew and shops reopened on the first day of the cease-fire brokered by Shiite lawmakers and representatives of Muqtada al-Sadr's political movement, who are thought to have influence over the extremists.

Al-Sadr followers distributed food in the neighborhood, residents said.

"We're doing limited operations in Sadr City as this implementation process takes place," said U.S. military spokesman Rear Adm. Patrick Driscoll.

He warned a truce had not yet been brokered and that the Iraqi government and Shiite representatives were still talking.

"It is important to emphasize that it is an ongoing dialogue process," Driscoll said. "It is premature to say there is an agreed-to truce"

There was no comment Sunday from the Iraqi government.

The U.S. military has repeatedly said its clashes are with rogue elements of al-Sadr's Mahdi Army. The bulk of al-Sadr's 60,000-strong Mahdi Army is not believed to have participated in the fighting, instead adhering to a general cease-fire ordered by al-Sadr last August.

"Hopefully there will be a diplomatic solution to the problem," Driscoll said.

Iraqi troops launched an operation inside Sadr City after militants began firing hundreds of rockets and mortars toward the heavily fortified Green Zone. Hundreds of people were killed or injured by the attacks and the subsequent fighting in the slum that is home to 2.5 million people.

Brig. Gen. Mike Milano, who is in charge of U.S. forces in Baghdad, said Sunday that since March 23, "these criminals have fired over 1,000 rockets and mortars throughout Baghdad causing 269 casualties; the majority of these attacks have come from Sadr City."

In an effort to prevent extremists from using the southern section of Sadr City, U.S. and Iraqi forces are building a barrier — reaching up to 12-feet high — to isolate it and disrupt supply and escape routes for militants. It will enclose a 1.16 square-mile area that houses nearly 800,000 people.

About 80 percent completed and with just two weeks remaining until it is done, the walled-in area will resemble many others around Baghdad.

"In other parts of Baghdad these proven measures have enabled the Iraqi Security Forces and government of Iraq to restore stability and security to threatened communities by creating safe markets and safe neighborhoods," Milano said.

A senior Mahdi Army commander in the district being enclosed said "we have concerns about this agreement" establishing a cease-fire.

"When U.S.-led forces enter the area, we fear that they will pursue us," he said speaking on condition of anonymity for security reasons.

Hundreds of civilians have fled their homes and aid groups claim some areas are desperately short of food and medicine after seven weeks of street battles.

"We don't see a humanitarian crisis," Brig. Gen. Mike Milano, a top U.S. military official, said Sunday, adding that markets around Sadr City were open.

Iraq's security forces on Saturday launched a new operation against al-Qaida in Mosul, which was considered the last important urban staging ground for al-Qaida in Iraq after losing its strongholds in Baghdad and other areas during the U.S. troop "surge" last year.

In violence elsewhere in Iraq on Sunday, police killed five gunmen west of Mosul. Unknown gunmen attacked a checkpoint manned by Awakening Council fighters, Sunnis who once sided with al-Qaida but now work with U.S.-led forces, killing one in Baquoba northeast of Baghdad, police said.

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Associated Press writers Selcan Hacaoglu and Qassim Abdul-Zahra contributed to this report.