Baghdad: Iraqi health officials said on Monday overnight clashes in Sadr City killed two people and wounded 25, including five children.

The clashes have marred the first day of a reported ceasefire between factions of Muqtada Al Sadr's political movement, who are thought to have influence over the extremists, and the Iraqi government.

Nasar Al Rubaie, a Sadrist lawmaker, says talks on final touches to the agreement are continuing Monday. Al Rubaie says he cannot comment on the latest clashes in Sadr City.

The US military has expressed hope for a diplomatic solution.