Sadr militia had taken control of government buildings in Shia towns or neighborhoods from Baghdad, south to Basra. Sadr's armed militia is not large, a few thousand men, but they are dedicated to the establishment of an Islamic Republic (like the one that has ruled Iran since 1979, and is generally hated by Iranians.) The fighting has left thirty or more Iraqis and eight coalition soldiers dead so far. Sadr was threatened with arrest six months ago if he didn't calm down his fiery rhetoric. Sadr could also feel the heat from the coalition cracking down on his henchmen. In recent days, 13 of his followers have been arrested as suspects in the murder of a rival Shia cleric, and another eleven of Sadrs aides are being sought. Sadrs newspaper was shut down on March 28th (for printing stories blaming coalition troops for suicide bombs and the like). Sadr has sort of talked himself into a corner, telling outrageous lies (the suicide bomb attacks in Iraq are the work of Americans), and appears to feel that he can seize people with a good old revolutionary coup (as was used during the Russian revolution in 1917, and many before and since.) Sadr can't win a battle like this, and it was always hoped he would realize this. But apparently not. Now a lot of people (Iraqis and coalition troops) are going to get killed because of the foolishness of one man.
Coalition forces have defeated the armed Sadr followers in Baghdad and are moving to disarm Sadr followers in other cities and arrest their leaders. Sadr is considered a troublesome minority by most Iraqis, and most Shia. Sadr does not have a seat on the governing council, mainly because his power base is so small. But Sadr has guns and is willing to use them.
Sadr is demanding that a date for the turnover of control of the government to Iraqis and the release of all Iraqis held prisoner by coalition forces.
Coalition forces have sealed off Fallujah, closing all roads. This is apparently in preparation of a military operation in the city.